Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

WEST MIDLANDS COUNTY COUNCIL BILL [Lords] (By Order)

Order read for resuming adjourned debate on Question proposed [28 June], That the Bill be now considered.

Debate further adjourned till Thursday 22 November.

DUMBARTON DISTRICT COUNCIL ORDER CONFIRMATION BILL

GREATER GLASGOW PASSENGER TRANSPORT ORDER CONFIRMATION BILL

KILMARNOCK AND LOUDOUN DISTRICT COUNCIL ORDER CONFIRMATION BILL

SCOTS EPISCOPAL FUND ORDER CONFIRMATION BILL

STIRLING DISTRICT COUNCIL ORDER CONFIRMATION BILL

Considered; to be read the Third time upon Tuesday 20 November.

Oral Answers to Questions — HOME DEPARTMENT

Draws and Lotteries (Liquor Prizes)

Mr. Hannam: asked the Secretary of State for the Home Department when he plans to remove the restriction on the use of liquor as prizes in draws and lotteries.

The Minister of State, Home Office (Mr. Timothy Raison): There are no plans at present for Government legislation on this subject.

Mr. Hannam: Is my hon. Friend aware that the police authorities regard the offering of liquor as prizes in draws, tombolas and bottle stalls as a contravention of the licensing laws? That is causing problems to many charities in their fundraising activities. Will he support an initiative by a Back Bencher to amend the licensing laws?

Mr. Raison: I am aware of the problem. As I have told the House already, we would look sympathetically and carefully at any Back Bench proposal.

Mr. Lawrence: It is obvious that this law is not enforced, because no one no longer believes in it. Is it not absurd to keep on the statute book a law that nobody wishes to see enforced?

Mr. Raison: My hon. Friend makes a valid point. There is no time for Government legislation in this Session. If there is some future prospect of Private Members' legislation, we shall be sympathetically disposed towards it.

Immigration Rules

Mr. Straw: asked the Secretary of State for the Home Department what is his policy relating to the admission of male fiancés to the United Kingdom.

Mr. Stanbrook: asked the Secretary of State for the Home Department if he will make a statement on the Government's proposals for the tightening of immigration control in the United Kingdom.

Mr. Winnick: asked the Secretary of State for the Home Department if he will


now give details of the changes he intends to make in the immigration rules.

The Secretary of State for the Home Department (Mr. William Whitelaw): I made a statement about this matter yesterday.

Mr. Straw: Is the Home Secretary aware that on 9 August his hon. Friend the Minister of State suggested that, as well as the rights of immigrants into this country being restricted, the rights of Members of Parliament to take up cases on their behalf should be restricted? Can the right hon. Gentleman give an undertaking that in no circumstances will he countenance any restriction on the rights of Members of Parliament to take up cases on behalf of their immigrant constituents?

Mr. Whitelaw: Certainly; I entirely agree. The hon. Gentleman says "on behalf of their immigrant constituents". There are a number of cases when Members of Parliament take up cases on behalf of other Members' constituents. I question whether that is a reasonable or fair proposition.

Mr. Stanbrook: Despite the simulated fury from Opposition Benches yesterday, and the predictable hostility of the politically motivated immigrants' organisations, is my right hon. Friend aware that the country is solidly behind the Government in their determination to stamp out the immigration racket and is looking forward to the early implementation of the remainder of the programme?

Mr. Whitelaw: I am grateful to my hon. Friend for his remarks.

Mr. Winnick: In view of widespread criticism, will the right hon. Gentleman rethink the proposals in the White Paper? Is it not the case that it would become virtually impossible for aged and dependent parents to join their children in the United Kingdom since any money that is sent to them will simply undermine their chances of joining their adult children?

Mr. Whitelaw: I think that the proposals about grandparents and other dependants are reasonable. They should be debated, and I shall certainly look into what the hon. Gentleman has said.

Mr. J. Enoch Powell: Following his supplementary answer to me yesterday, is the right hon. Gentleman now in a position to estimate the reduction in the intake from the new Commonwealth and Pakistan due simply to the proposals regarding male fiancés?

Mr. Whitelaw: Something of the order of 2,000. I should like to apologise to the right hon. Gentleman for not having answered the second part of his question yesterday. As to the end of the century, no one can estimate the increase, and the effect carrying on from that, if some action on these particular lines had not been taken.

Mr. Jessel: Will the condition that fiancés must have met mean that they must have met since growing up, because in some countries parents arrange engagements to marry between quite young children who may then meet? Surely that ought not to count?

Mr. Whitelaw: This is a matter that has to be considered under the rules by the immigration officer concerned in the light of each individual case.

Dr. Summerskill: Will the right hon. Gentleman clarify the position, which is still obscure, of an application under the rules that is made between the publication of yesterday's White Paper and the date when the new rules are laid before, and agreed by, Parliament? Will such an application be accepted and a decision made on it under the old rules and not the new rules, because the new rules will have no force in law until they are agreed by Parliament?

Mr. Whitelaw: I hope that I can give the hon. Lady a clear answer. I tried to yesterday, but I accept that I did not satisfy the House on this matter. I shall try again. Paragraph 13 of the introduction to the White Paper makes it clear that applications for entry will be decided on the basis of the rules in force at the time the decision is taken. An application that is made before the publication of the White Paper will, however, be decided on the basis of the existing rules, even though the decision may be taken after the new rules come into force.

Immigrant Population (Grants to Local Authorities)

Mr. Dubs: asked the Secretary of State for the Home Department what progress he has made in reviewing the operation of section 11 of the Local Government Act 1966.

Mr. Raison: The review involves a number of difficult issues which will need further consideration before any decisions can be reached.

Mr. Dubs: Is the Minister aware that section 11 of the Local Government Act 1966 is in its small way a useful aid to local authorities in multi-racial areas? Can he give some date when the review will be completed in order that section 11 can be made more sensitive to the needs of such areas?

Mr. Raison: I accept that section 11 is of some value, as the hon. Gentleman says. However, the question of how to replace it is a complicated one, and I cannot now say exactly when we shall be ready with proposals on that matter.

Mr. Alexander W. Lyon: Surely all the difficulties were solved in the Local Government Grants (Ethnic Groups) Bill presented by the last Government? If the Minister really wants to improve race relations, is he aware that this is the most important contribution that a Government could make?

Mr. Raison: I doubt whether the hon. Gentleman's second point is altogether true. As to his first point, while I accept that this is a useful piece of legislation, I believe that the problem of how to replace it is a complicated one. We made it clear in opposition that a number of difficulties had to be faced up to, and we are thinking hard about these problems.

Police Complaints Board

Mr. Cryer: asked the Secretary of State for the Home Department when he next expects to meet the chairman of the Police Complaints Board.

Mr. Whitelaw: I have no present plans for a further meeting with Lord Plowden.

Mr. Cryer: Does the Home Secretary accept that there is considerable dissatisfaction with the current police complaints

procedure? Does he accept that the police force is a publicly accountable force and that there ought to be an independent element of investigation into police complaints? That has been considerably reinforced by the recent deaths of Blair Peach and Jimmy Kelly. Many hon. Members are concerned to ensure that the police maintain and improve their reputation. Surely one of the ways to do this would be to have an independent investigation into police complaints rather than have the police investigating them.

Mr. Whitelaw: I am sure that the hon. Gentleman will remember that the previous Government, supported by myself and many others, believed that it was right to set up an independent element of inquiry into the police through the Police Complaints Board. I believe that the board is independent. I only wish that the House would accept that it is. This House set up the Police Complaints Board as an independent element of inquiry. Now that it has been set up, for some reason which I do not understand certain hon. Members will not accept that what they set up as independent is independent. The hon. Gentleman mentioned two specific cases. I am sure that he will appreciate that they are both the subject of inquiries and possible investigations by the Director of Public Prosecutions. Therefore, it would be quite improper for me to add anything in respect of either of them.

Mr. Aitken: Is my right hon. Friend aware that on the whole the Police Complaints Board has a reputation for carrying out its powers thoroughly and fairly? Of course, it has no power to investigate complaints that involve criminal, or possible criminal, prosecutions. Is my right hon. Friend also aware that one of the defects in the existing system is that the board is not complainant-activated, and as a result must trawl through a vast mass of complaints which are trivial and vexatious and were never really intended to come before the Board at all?

Mr. Whitelaw: I am grateful to my hon. Friend. There is a lot of truth in what he has said. The board is due to make a report on the first years of its activities next year. We can then all investigate to see whether further improvement ought to be made in its procedures.

Mr. Meacher: Does the Home Secretary accept that the present police complaints procedure is not a satisfactory means of investigating the deaths of no fewer than 60 persons who have died in police custody over the last nine years from non-natural causes excluding suicide? Does he accept that the evidence of so many cases of violent injury and death while in police custody—not only Jimmy Kelly and the others who have been mentioned—is now on such a scale as to require a public inquiry if confidence in the police is to be restored?

Mr. Whitelaw: I could not conceivably accept what the hon. Gentleman has said. I have no intention of doing so without looking into the facts, and that I am perfectly prepared to do. Equally, I should add that the House set up the Police Complaints Board and we shall have an opportunity to look at its activities over the period since it was set up. Surely we ought to do so. But to go on arguing that it is not independent, when we set it up as independent, and to suggest that it cannot do the job when we set it up to do the job, is an extraordinary way for the House to proceed.

Mr. Emery: Will my right hon. Friend take note that the only complaints against the present police complaints procedure come from the extreme Left of the Labour Party?

Mr. Whitelaw: It is not for me to say from where the complaints come, but I do notice. I have a good eye for what is going on.

Mr. Kilroy-Silk: Does the Home Secretary accept that there is considerable public concern and disquiet into the policing of Knowsley by the K Division, not just because of the death of Jimmy Kelly after being in police custody, but also because of the injuries sustained by a constituent of mine, Michael Canavagh, who lost a spleen and a kidney after being in police custody? There are many similar cases of serious allegations. Would not these be dissipated by an independent public inquiry, not least so that the reputation of the police, and the public's confidence in it, can be restored? This concern will not be allayed by an investigation carried out by internal means.

Mr. Whitelaw: I can only say to the hon. Gentleman that over the years evidence

of what has happened at the public inquiries has never been as satisfactory as he hoped it would. In many cases, public inquiries have not led to the results that many people hoped they would—

Mr. Russell Kerr: Nor have police inquiries.

Mr. Whitelaw: Where there is any lapse of duty on the part of any police officer, it is very important that that should be pursued through the courts and the criminal procedures. It is very important indeed that the police live within the law. I entirely agree with what the hon. Gentleman says. An inquiry is going on into some of the cases that he raised. That inquiry is an internal one but is being carried out by a police officer from another force—that is important—and the result will go to the Director of Public Prosecutions. It will, therefore, then be outside the police itself. Here again, I think that we should wait to see how that procedure works.

Mr. Farr: Is my right hon. Friend aware that while the Police Complaints Board is a good body to have set up, in many cases where one refers a case to the board it seems to rely for its decision purely upon evidence provided by the police? A number of people feel that the present set-up should be changed and improved to allow more of an independent assessment?

Mr. Whitelaw: I am grateful to my hon. Friend. That is exactly the opportunity that the House will have when the board makes its report on the first years of its operations. We shall then have to look at it very seriously and consider whether we have got it right.

Mr. George Cunningham: With regard to the Blair Peach case, which has been mentioned in these exchanges, I recognise that the Secretary of State will want to wait for the outcome of the inquest, but will he keep his mind open about the desirability, perhaps, of a public inquiry at the end of that inquest, as much in the interests of the police as of those who are complaining against the police?

Mr. Whitelaw: I appreciate what the hon. Gentleman says. I am very strongly advised by lawyers, and when I am advised by lawyers I believe it to be right to take their advice. I have not always


been so loyal to lawyers, but in this case It would seem to be an ideal solution to it would be quite wrong of me to make any comment.

Road Traffic Offences

Mr. Temple-Morris: asked the Secretary of State for the Home Department if he considers that the amount of police time spent on road traffic offences could be reduced.

The Minister of State, Home Office (Mr. Leon Brittan): While it must be for individual chief officers to decide how best to use the manpower available to them, I hope that the working party which the Government have decided to set up, to review fixed penalties and other aspects of traffic law, will be able to suggest ways of saving police time.

Mr. Temple-Morris: The Minister and his right hon. Friend are to be congratulated on the review which they have set up, but is the Minister aware that this is limited to fixed penalties and that there is also the possibility of a points demerits system?
What has the Minister to say about two things which are absent from the review—first, any consideration of a spot penalty system and, secondly, the abuse, which is very prevalent in this country at the moment, of the HORT 1 system, namely, the presentation of driving documents at a police station within five days? Does he not think that at least the compulsory carrying of driving documents might be considered in this review?

Mr. Brittan: The question of spot penalties raises wider issues than would be possible within a review of this kind. The carrying of driving licences and their presentation are primarily matters for my right hon. Friend the Minister of Transport.
In setting up the review, we have been very much assisted by the work of my hon. Friend the Member for Leominster (Mr. Temple-Morris), who has looked into these matters and himself produced a report on them.

Mr. Hill: Is my hon. and learned Friend aware that this may be an opportune time at which to set up two separate forces—one to concentrate completely on traffic regulations and offences, and the other to deal with major crimes?

It would seem to be an ideal solution to incorporate the traffic warden system into this traffic force.

Mr. Brittan: I am a little sceptical of suggestions concerning major reorganisations of that kind, because they nearly always lead to more expenditure and less efficiency. But we shall certainly want to consider what my hon. Friend has said.

Law and Order

Mr. Marks: asked the Secretary of State for the Home Department what consultation he has had with regard to the need for local authorities to maintain their expenditure on all aspects of the maintenance of law and order, including after-care services to courts and those education and social services which help to prevent crime.

Mr. Brittan: The Government have made clear to local authorities the priority they attach to expenditure on the law and order services, and that in particular the plans for courts, police and probation services should not suffer any reduction.

Mr. Marks: Is the Home Secretary satisfied, then, that there will be no cuts in the staffs dealing with truancy in schools and in the social services departments which give counselling to young people?

Mr. Brittan: These are matters for the local authorities. We have indicated that we think it right that priority should be given to matters concerned in the broadest sense with the maintenance and improvement of law and order. I have no doubt that the local authorities concerned will, because of their own public opinion, wish to give to these matters the priority that the Government attach to them.

Mr. John Townend: Does my hon. and learned Friend agree that the level of expenditure is not necessarily an indication of the effectiveness of a service, and that, although law and order is the first priority, there is scope for reduction in bureaucracy in this as in every other area of local Government.

Mr. Brittan: I agree that that is so. My hon. Friend, with his very great experience of these matters, has shown that that is absolutely the case.

Taxicab Meters (London)

Mr. Bendall: asked the Secretary of State for the Home Department why it is necessary to have meters used in London taxicabs sealed by both the British Standards Institute and the Carriage Office.

Mr. Raison: Because two different processes are involved. The British Standards Institute tests and seals the meter itself. The Public Carriage Office tests the meter on the cab and seals it in place.

Mr. Bendall: In view of the Minister's answer and the time elements and costs involved, can he say, with regard to the new electric meter that is liable to come into operation in the near future, whether it will be subject to an annual test or whether it can be dealt with by the British Standards Institute?

Mr. Raison: I understand that the new electronic meters are unlikely to need such frequent testing, but the precise requirements are a matter for the licensing authority.

Mr. George Cunningham: It may be bad enough for two authorities to be involved, but would it not be much worse if the European Commission were also to get involved in the business of authorising the shape and size of London taxis? Will the Minister of State find some way of notifying to the House the interest of the European Commission in this subject at the moment, and make sure that before the Government do anything there will be full consultation with drivers and owners of London taxis?

Mr. Raison: There is an EEC directive which requires mechanical taxi meters to be both bench-tested and road-tested. There does not seem to me to be anything wrong with that. If there are changes, we shall, of course, consult with the EEC about them.

Mr. Edward Gardner: Will my hon. Friend take steps to see that London cabs all have up-to-date meters, to avoid the use of a computer every time one tries to discover the fare?

Mr. Raison: I have a good deal of sympathy with the point raised by my hon. and learned Friend, but I do not think that it is for me to determine.

Coroners' Courts

Mr. Ashley: asked the Secretary of State for the Home Department if he is satisfied with the operation of coroners' courts.

Mr. Raison: I am not aware of any general grounds for dissatisfaction with the system of coroners' courts. It is not for me to comment on the way in which coroners, who are independent judicial officers, carry out their duties within the framework of the law.

Mr. Ashley: Is the Minister aware that there is a great deal of personal distress caused when close relatives have to identify bodies after industrial death, accidental death or violent death, and that this could be avoided by the Government introducing legislation to avoid the requirement to identify bodies, or, alternatively, by the Government supporting the Bill put forward by the hon. Member for Wolverhampton, South-West (Mr. Budgen)?

Mr. Raison: I sympathise with the distress of bereaved relatives in these circumstances, but where the police are called to a death certain facts have to be established, and it is generally thought best to do this immediately, in order to avoid a second interview if at all possible. But I will consider the right hon. Gentleman's point.

Mr. Skinner: Is the Minister aware that there is also need for the Government to take evidence from many coroners who on various occasions have expressed certain disquiet about the way in which, after they have certified deaths due to pneumoconiosis in the mining industry, the pneumoconiosis medical panel has rejected such certification, with the result that the widow concerned has not received industrial death benefit? I hope that the Minister will take evidence from coroners, particularly those in the mining communities, in order to establish precisely what ought to be done in those cases.

Mr. Raison: This is a subject that I have not considered, but I will look into the point that the hon. Gentleman has raised.

Prison System

Mr. Hardy: asked the Secretary of State for the Home Department if he has considered the 15th report of the Select Committee on Expenditure concerning the reduction of pressure on the prison system; and if he will make a statement.

Mr. Whitelaw: I refer the hon. Member to the reply I gave to a question by the hon. Member for Ormskirk (Mr. Kilroy-Silk) on 9 November.

Mr. Hardy: Does the Home Secretary agree that there is urgent need for attention to the question of the development or further development of the system of community service orders, and for the development of partially suspended sentences? Will he consider taking some action to ensure that these relevant steps are made possible before the end of next year?

Mr. Whitelaw: I am extremely grateful to the hon. Gentleman. I agree with him entirely. We shall do everything we can to encourage those concerned to make more use of community service orders and have regard to the other proposal that he has made.

Mrs. Renée Short: The right hon. Gentleman must be aware that there have been a large number of reports about the prison system by Committees of this House and committees outside. What will he do to carry out some of the recommendations of the May committee to improve conditions and to reduce overcrowding within the prisons, as well as to involve more community people in looking after prisoners within the prison?

Mr. Whitelaw: The report of the May committee is extremely important and very valuable. I intend inside the Home Office to make sure that we respond positively to many of the proposals made concerning the Home Office. We also intend to respond positively to the proposals for taking some people, such as the mentally disordered, out of prison. That is very important. We responded positively and immediately in accepting all the proposals on pay and allowances of prison officers put forward by the May committee. We shall continue on that basis.

Mr. Stanbrook: Will my right hon. Friend consider taking powers to enable him to transfer to their own countries Commonwealth citizens who are in prison in this country, so that they might then be able to be in touch with their relatives at home?

Mr. Whitelaw: I should like to consider what my hon. Friend has said; and I shall certainly do so.

Mr. Alexander W. Lyon: Will the Home Secretary publish in the Official Report details of what would be the effect upon the prison population if the recommendations of the May committee that certain types of prisoners should not be in prison were carried through? That may be a starting point, before the right hon. Gentleman examines how much should be spent on prisons.

Mr. Whitelaw: That is an interesting and important suggestion. I shall certainly look into it.

Nursing and Residential Homes (Fire Precautions)

Mr. Sainsbury: asked the Secretary of State for the Home Department whether he will now introduce an order extending the operation of the Fire Precautions Act 1971 to nursing homes registered under the Nursing Homes Act 1975 and to disabled or old persons' homes registered under the National Assistance Act 1948.

Mr. Brittan: The consultation to which I referred in my reply to my hon. Friend's question of 28 June is proceeding, but I am not yet in a position to make a statement.

Mr. Sainsbury: I hope that my hon. and learned Friend appreciates that there are about 5,000 homes and about 200,000 residents involved. Surely he would accept that, now that the inspection and certification of hotel premises has been either completed or very largely completed in most areas, it would be right to extend the protection afforded by the Fire Protection Act to those 200,000 residents?

Mr. Brittan: I accept that there is a need to bring about a phased improvement in fire precautions in premises in the health and social services sector. But the question we have still to consider is


exactly what steps we should take to identify the particular institutions which need further fire protection measures, and what measures are best designed to achieve a greater increase in safety in those institutions.

Immigration Service

Mr. Wheeler: asked the Secretary of State for the Home Department how many movements in and out of the United Kingdom have been checked by the immigration service at airports and seaports during the peak months from 1 April to 30 September.

Mr. Raison: The number of persons subject to immigration control admitted to the United Kingdom during the period 1 April to 30 September 1978 was just over 8 million. Of these, almost 5 million came in at airports and just over million at seaports. Information about the numbers of such persons leaving the United Kingdom is not collated centrally.

Mr. Wheeler: I thank my hon. Friend for that information. The figures, indeed, are tremendous, and I congratulate the Immigration Service on its handling of so many people. Will my hon. Friend tell me how many people have been refused entry?

Mr. Raison: I am grateful for what my hon. Friend said about the Immigration Service. The answer to his question is that about 8,000 passengers were refused leave to enter the United Kingdom during the period April to September 1978.

Mr. Buchan: I wonder whether the Minister of State could persuade his right hon. Friend the Home Secretary to reconsider his earlier statement in relation to Members of Parliament raising the question of immigrants into this country? The right hon. Gentleman suggested that it was perfectly proper for hon. Members to raise matters on behalf of their own constituents, but not on behalf of constituents of any other hon. Member. In view of the shortness of time within which it is often necessary for a Member of Parliament to act in such cases, and as many Members of Parliament have expertise in this area—I have a connection with Chilean refugess—would he not regard his statement as a gross interference with the rights and privileges of individual Members?

Mr. Raison: What causes my right hon. Friend and myself concern is the habit that has grown up, in some cases, where one hon. Member has taken up a case and then, as it were, relinquished it for another hon. Member to step into the breach. That is contrary to the normal customs of the House, and causes real problems.

Equal Opportunities Commission

Mr. Stoddart: asked the Secretary of State for the Home Department if he has any plans to meet the Equal Opportunities Commission in the near future.

Mr. Whitelaw: I have no present plans for a meeting.

Mr. Stoddart: I rather thought that might be the answer, following yesterday's White Paper. As the Equal Opportunities Commission shares the concern of the Commission for Racial Equality about a virginity test on women immigrants, will the Minister meet the Equal Opportunities Commission and explain why he has blocked its desire to investigate virginity tests and other matters of immigration? Indeed, the Commission is now thinking about going to law.

Mr. Whitelaw: The hon. Gentleman seems to have moved from one Commission to the other. He asked me a question about the Equal Opportunities Commission and moved on to ask a question about the Commission for Racial Equality. I think I must answer the question that he asked in the first instance. I shall, of course, consider any representations from the Equal Opportunities Commission. I have heard its views, and I understand them. I do not have to accept them.

Mr. Michael Brown: Does my right hon. Friend accept that there could be a useful saving of public funds if the whole future of the Equal Opportunities Commission were reconsidered?

Mr. Whitelaw: The Government are committed to the Equal Opportunities Commission; and we shall certainly support its work. I wish to co-operate with the Commission and I am very pleased to do so.

Mr. Christopher Price: Does not the right hon. Gentleman feel that it is important that the Government should not,


as it were, be legally exempt from investigations by either the Equal Opportunities Commission or the Commission for Racial Equality, and that they should not be able to hide behind any sort of privilege if they are breaking the principles on which those two Commissions were founded?

Mr. Whitelaw: That sounds like the kind of generality that I could entirely accept.

Mr. Merlyn Rees: Does the right hon. Gentleman confirm that the order I gave for virginity tests to cease in all parts of the world continues and that the Yellow-lees inquiry into medical examinations throughout the world will, in whatever appropriate fashion, be published?

Mr. Whitelaw: I can answer "Yes" to both those questions.

Prison Population

Mr. Knox: asked the Secretary of State for the Home Department how many people are serving sentences in Her Majesty's prisons at the present time.

Mr. Brittan: On 15 October 1979, there were 35,287 persons serving sentences in prison department establishments in England and Wales.

Mr. Knox: Does not my hon. and learned Friend agree that these figures are much too high, and has he any proposal to reduce the number? When will the Government announce a decision on the proposals in the May report concerning prison building?

Mr. Brittan: I agree that the figures are too high. The proposals contained in the May report, together with other suggestions that have been made for reducing the prison population, are being considered. I cannot yet say when it will be possible to announce decisions relating to them.

Mr. Kilroy-Silk: Will the Minister of State tell us what action will be taken—I hope soon—to remove from prisons the mentally ill and disordered, the vagrants, the drunks and petty offenders? Will he say whether the Government will implement the recommendations in the report of the advisory council on the penal system as to shorter sentences?

Mr. Brittan: The hon. Gentleman has raised a number of matters. The removal of the mentally ill from prisons clearly involves my right hon. Friend the Secretary of State for Social Services. He continues to press the health authorities to make proper provision for such offenders, including the establishment of regional secure units. Many, if not most, of the other proposals can be considered in the light of the May report, which is what we are doing.

Television Reception

Mr. Beith: asked the Secretary of State for the Home Department whether, in view of the fact that many people in rural areas still cannot receive 625-line television transmissions, he will defer the ending of 405-line transmissions until full national coverage has been achieved.

Mr. Brittan: There has not yet been a decision on the timetable for the closure of the 405-line VHF television services. The programme for extending the 625-line UHF services to all communities with permanent populations of 500 or more is now well advanced, and is continuing.
The closure of the 405-line service will be phased over several years, and the aim will be to ensure that, so far as is possible, no 405-line transmitter is closed until the UHF coverage programme in the area is substantially complete.

Mr. Beith: Will that extend to those who live in communities of less than 500 people? Does the Minister recognise that there are many remote farms and scattered communities with no access to entertainment facilities, and very little to educational facilities, for whom the limited service now available on 405 lines is all they have? Does he realise that that must be maintained until an alternative can be provided?

Mr. Brittan: I very much recognise the problem that the hon. Gentleman has raised. I, like the hon. Gentleman, represent a constituency which contains many such people. I think that it is important to take the interests of those concerned into account when working out this programme, and I assure the hon Gentleman that what he has said will be taken fully into account when such a statement is made.

Mr. Cockeram: Does the Minister agree that this is not a problem that is limited to Scotland and Wales, but that there are substantial acreages of England where the population cannot receive 625-line transmission? The BBC has been quite oblivious to the needs of these communities. Will my hon. and learned Friend ensure that their interests are safeguarded?

Mr. Brittan: I accept that there are considerable tracts of territory in England which face this problem. As I said, I represent some constituents who are in exactly that situation. We are very mindful of the concerns and interests of such people.

Convicted Persons (Voting Rights)

Mr. Soley: asked the Secretary of State for the Home Department if he will bring forward proposals to repeal section 4 of the Representation of the People Act 1969, so as to allow convicted persons to vote during detention.

Mr. Brittan: We have no present plans to do so.

Mr. Soley: Does not the Minister agree that the deprivation of liberty is sufficient punishment in itself and that prisoners should not be deprived of other human rights? Will he reconsider his position?

Mr. Britian: I am not prepared to reconsider this position. It has long been accepted that one of the consequences of a conviction and a custodial sentence is the loss of various civil rights, of which this is one.

Mr. Heddle: Would my hon. and learned Friend consider repealing parts of the Representation of the People Act 1969 in order to allow those on holiday to vote in United Kingdom elections?

Mr. Speaker: That is another question altogether. The hon. Member should put it on the Order Paper.

Detention Centres (Regimes)

Mr. Kilroy-Silk: asked the Secretary of State for the Home Department what progress he has made in establishing the new tough experimental regime at the two detention centres.

Mr. Latham: asked the Secretary of State for the Home Department whether

he will now give details of his proposals for a stricter regime in selected detention centres for persistent young offenders.

Mr. Whitelaw: The pilot project will be established within existing legislation at New Hall, a senior detention centre in West Yorkshire for offenders aged 17 and under 21, and at Send, a junior detention centre in Surrey for offenders aged 14 and under 17. With full remission, the minimum period for offenders in custody will be eight weeks at New Hall and six and a half weeks at Send. All offenders from the relevant age groups and catchment areas will undergo the more rigorous regime unless they are physically or mentally unfit, or initially receive more than the minimum three months' sentence. The regime will place emphasis on brisk and constructive activities, discipline and respect for those in authority; there will be drill, parades and inspections. The project, which will be carefully monitored, will start in the spring of 1980.

Mr. Kilroy-Silk: I thank the sergeant-major. Why does the Home Secretary laugh, particularly when, according to the medical officer at Send detention centre, who wrote an article in the latest issue of the Prison Medical Journal, the vast majority of boys who will be subjected to this regime are physically ill, mentally unstable and socially deprived? All the evidence available shows that these short sharp shocks, which have been used before, are a dismal failure. Does not the Home Secretary agree that it would be right and proper for him now to stop pandering to the law and order lobby? He should try telling the truth and involve himself in a constructive educational programme for dealing with juvenile crime, rather than engaging in this unnecessary barbarity.

Mr. Whitelaw: I did not laugh, and I do not accept what the hon. Member said. I intend to pursue constructive proposals for the treatment of young offenders, alongside this proposal which I believe is essential for some of the hardened young thugs.

Mr. Latham: Is my right hon. Friend aware that the so-called law and order brigade represents about 95 per cent. of people in this country? We hope that he will proceed with these policies effectively and that he will take no notice of


those whose suggestions have been singularly unsuccessful.

Mr. Whitelaw: We intend to pursue these policies as an experiment. I wish to see how they proceed.

Mr. Merlyn Rees: The right hon. Gentleman is setting up two institutions as an experiment. Is he aware that we wish to know more about the experiment—the cost, staff, the training, and the types of young person covered by the scheme? In particular, we shall need information to enable us to make proper comparisons. If all the appropriate young people are put into two institutions, it will be impossible to compare these with other institutions. I disagree with what the Home Secretary is doing, but as this is an experiment, we have the right to full information.

Mr. Whitelaw: I accept the right hon. Member's last comment. The only significant addition to normal costs is likely to arise if it is necessary to increase the present staff. Decisions on this will be taken during the planning of the project. On the other points that the right hon. Member raised, we will do our best to meet his wishes and those of the House.

Police

Mr. Alton: asked the Secretary of State for the Home Department what is the total annual expenditure on the police force; and how many policemen and women are currently employed by British police authorities.

Mr. Brittan: Total expenditure in England and Wales for 1978–79 was £1,161 million. On 30 September 1979, 112,491 police officers, including those in interforce units or on central service, were employed.

Mr. Alton: In view of the statement by the Home Secretary at Blackpool earlier this year that there would be a return to more policemen on the beat from panda cars, will he tell us when a circular will be issued to the police authorities to this effect?

Mr. Brittan: That is a matter that is best dealt with by the police authorities and the chief constables in question.

Oral Answers to Questions — USSR

Mr. Stoddart: asked the Prime Minister if she will pay an official visit to the Union of Soviet Socialist Republics.

The Prime Minister (Mrs. Margaret Thatcher): I have at present no plans to do so.

Mr. Stoddart: Is the Prime Minister aware that many people in this country regret the belligerent attitude that she is taking towards the Russians—[HON. MEMBERS: "Who?"]—Many people. Is she also aware that they regard the decision to station a new generation of nuclear weapons in this country as provocative and highly dangerous to world peace and the safety of the British people and others in Western Europe? Will she reconsider her decision and pay a visit to the Soviet Union, not in Churchill's trousers, but as a peace maker? Will she urge upon the Russians—and, indeed, all nations—that a reduction in weapons of mass destruction is the only way to world peace?

The Prime Minister: The message that I have received from the country is that the only way to tackle a potential threat from any potential aggressor is to be strong in defence forces in this country and to be strong enough at each and every level to deter any potential aggressor. That is the policy that we shall continue to follow.

Mr. Maxwell-Hyslop: Does my right hon. Friend agree that there is little purpose in holding discussions with the Russian leaders while they fail to honour the agreements that they have already entered into, such as the Helsinki agreement?

The Prime Minister: We long for the day when the agreement which the Soviet Union signed is, in fact, honoured.

Mr. James Lamond: Does the Prime Minister recall that President Carter said that to keep the peace we must avoid an uncontrolled and pointless nuclear arms race? If that is the case, why does she not go to the Soviet Union in a conciliatory vein and meet Mr. Brezhnev to discuss the proposals that he put forward on 6 October including those to reduce nuclear armaments in the European theatre?

The Prime Minister: We are always prepared to consider disarmament, provided that it applies to both sides. I hope that when I meet the leaders of the Soviet Union again—I met Mr. Kosygin in Moscow on my way to Tokyo—we shall be in a position to negotiate from strength.

Mr. McCrindle: While the Prime Minister is at home, and until she has the opportunity to visit the Soviet Union, will she take account of the recent press reports which indicate the most alarming development in both the quantity and quality of Russian arms in Europe?

The Prime Minister: It is true that the Russian forces in Europe are receiving the most up-to-date theatre nuclear weapons and that NATO has not had any new weapons for about 10 years. That is the task to which we must put our hand at the next NATO meeting early in December. We must agree to modernise those theatre nuclear forces.

Oral Answers to Questions — PRIME MINISTER (ENGAGEMENTS)

Mr. William Hamilton: asked the Prime Minister what are her official engagements for 15 November.

The Prime Minister: This morning I presided at a meeting of the Cabinet. In addition to my duties in this House I shall be having further meetings with ministerial colleagues and others. This evening I shall be attending a banquet given by President Soeharto of Indonesia.

Mr. Hamilton: Was the Cabinet meeting this morning happy and agreeable? When the right hon. Lady was appointed to her high office last May, did she imagine that she could produce such a shambles in such a short time? Can she give an assurance that we will not be plunged much deeper into the mire before she does a U-turn on incomes policy?

The Prime Minister: As usual, the Cabinet was united this morning—[Interruption.]

Mr. Speaker: Order. Hon. Members are merely reducing the time for questions.

The Prime Minister: As usual, the Cabinet was united this morning in its determination to carry through those policies upon which the Conservative Party fought and won the election. The question behind the supplementary question of the hon. Member for Fife, Central (Mr. Hamilton) perhaps refers to the interest rates announced today. With the expansion in borrowing that we are facing, the alternative was either to raise interest rates, as we did, or to print money. We would not print money, and it was necessary to raise interest rates to conquer inflation. With Government borrowing as high as it is—it would have been higher had the Labour Party been in office—we must have interest rates high enough to get in the money to pursue existing expenditures. I shall be grateful for the hon. Gentleman's support in getting down public expenditure so that we may get down interest rates.

Mr. Hannam: Will my right hon. Friend take time off today to explain to the British miners that it is impossible to reconcile their complaints about the importation of cheaper coal from abroad with the exorbitant pay demands that they are now making?

The Prime Minister: The issue of importing cheaper coking coal is vital for the British Steel Corporation, which already has many difficulties. Coking coal from the National Coal Board costs about £40 a ton. The imported coking coal costs about £30 a ton. It is necessary for the steel industry to have minimal raw material costs to stay competitive.

Mr. Foot: In view of the reply that the right hon. Lady gave a short while ago, will she say when she mentioned a 17 per cent. minimum lending rate during the election? If she does not have the date handy, will she publish it in the Official Report?

The Prime Minister: May I welcome the right hon. Gentleman back? The right hon. Gentleman knows that our policies about fighting inflation were never in doubt. We do not flinch from taking the steps necessary to tackle inflation. There were times when my predecessor had to increase interest rates. With borrowing expanding as it was, we had to put up the rates. With the present level of public expenditure, we must have the interest


rate high enough to get in the necessary amount in gilts. If the right hon. Gentleman, too, will support us in getting down public expenditure, the interest rates, too, can come down.

Mr. Foot: As the right hon. Lady says that her policies for dealing with inflation were never in doubt, will she tell us when she mentioned a 15 per cent. rate of VAT in the election?

The Prime Minister: If the right hon. Gentleman read the Conservative Party manifesto, no doubt he found that it stated that a number of decisions on public expenditure had to be taken, that public expenditure had to be reduced, and that we would take the necessary decisions. We also said that we would transfer from direct taxation to indirect taxation, and that we did. I believe that in the end it will result in incentives that will increase the national income.

Mr. David Steel: Does the Prime Minister recall the occasion almost a year ago when she told—

Mr. Skinner: She ought to.

Mr. Steel: Shut up. [Interruption.] I am sorry, Mr. Speaker. Does the right hon. Lady recall the occasion a year ago when she told the House that a Prime Minister who had to shove interest rates up to over 12 per cent. was quite hopeless at handling economic affairs? If she still sticks by that view, will she advise this young man how he should regard the economic competence of the present Prime Minister?

The Prime Minister: I seem to remember that the reply that I received on the occasion to which the right hon. Gentleman refers, or a similar occasion, was that there was no alternative in the light of the increase in borrowing. If that applied then, it applies now. I must react to the circumstances that face us now. Conditions would have been much easier for us if there had not been the value added tax strikes and problems, and if there had not been the strike that prevented the issuing of telephone bills, which means that we are—[Interruption.]

Mr. Speaker: Order. The House is being unfair. It must listen to the right hon. Lady's answers.

The Prime Minister: That strike means that we shall be short this year of about

£400 million, which means extra borrowing.

Mr. Burden: When my right hon. Friend took office, did she expect to find foreign overseas borrowings raised by the previous Government amounting to $26·133 billion?

The Prime Minister: The borrowing that took place under the previous Government was of a record amount. Borrowing more than doubled during the lifetime of the previous Government. The whole of the public sector borrowing requirement this year has to go to paying interest on previous borrowing.

Oral Answers to Questions — COMMISSIONER TUGENDHAT

Mr. Flannery: asked the Prime Minister if she has any plans to meet Mr. Tugendhat of the EEC in the near future.

The Prime Minister: I met Mr. Tugendhat in September. I have at present no plans for a further meeting.

Mr. Flannery: Does the right hon. Lady remember that her predecessor, the right hon. Member for Sidcup (Mr. Heath), as Leader of the Tory Party promised in a White Paper positive and substantial gains on our balance of payments if we went into the Common Market? Will she explain to Mr. Tugendhat that the £4,000 million that the Common Market has cost us and the £1,000 million that it is now costing us every year is driving our people to desperation, and that they want to get out of the Common Market now? Will she take it up with him, because the cost to Britain will grow and grow until we come out?

The Prime Minister: The Common Market gives our manufacturers the same opportunities as other manufacturers in the larger market of the Common Market. I agree with the hon. Gentleman that it is a great tragedy that we have imported many more manufactured goods from the Common Market than we have been able to sell in other member States of the Common Market. If we can get rid of strikes and increase productivity, we shall do a great deal better.

Mr. Gummer: Will my right hon. Friend please take as many opportunities as possible to point out to the Opposition that they wasted four years in which


they could have built up our place in the European Economic Community to enable us to compete with our friends in the Community?

The Prime Minister: My hon. Friend knows that I have frequently said that had we spent as much time on increasing productivity as we spent on incomes policy we would have done much better.

Mr. Heffer: Will the Prime Minister explain what cash limits she will put on the EEC in the same way as she is putting cash limits on local authorities and public authorities? Will she not go beyond the cash limits that she has already announced?

The Prime Minister: That is hardly the right way to approach that issue, as the hon. Gentleman knows. We need substantially to reduce the net contribution that we make to the Common Market for 1980–81. I am grateful to have the hon. Gentleman's support and the support of the whole House in that objective.

Oral Answers to Questions — PRIME MINISTER (ENGAGEMENTS)

Q.4. Mr. Bob Dunn: asked the Prime Minister if she will list her official engagements for Thursday 15 November.

The Prime Minister: I refer my hon. Friend to the reply I gave earlier.

Mr. Dunn: Will my right hon. Friend take time from her arrangements today to consider how best to persuade our NATO allies urgently to increase expenditure on defence? Will she continue to remind our allies in NATO that the hallmark of a free society is the ability to defend itself?

The Prime Minister: I totally agree with my hon. Friend that those of us who value a free society must be prepared, as a first charge, to ensure that it is properly defended. My hon. Friend knows that we have accepted the NATO target of a 3 per cent. annual increase in expenditure. I hope that other NATO countries will also accept that increase. Many of them already spend far more per head on defence than we do.

Mr. James Hamilton: Will the right hon. Lady give time today to deny the

fact that her Government are operating an incomes policy? It appears that for private enterprise free collective bargaining is all right, but the right hon. Lady has put a ceiling on the public sector.

The Prime Minister: As far as the public sector is concerned, we set cash limits, but the cash limits that apply to the nationalised industries are but a very small part of their total income. We set those limits with a view to getting unit wage costs down, and I am grateful for the opportunity to make that clear.

CONSTITUENCY REPRESENTATIONS (MEMBERS' RIGHTS)

Mr. Buchan: On a point of order, Mr. Speaker. I am concerned about the rights and privileges of hon. Members. That concern arises from the Home Secretary's answer to a question on immigration policy and was compounded by an answer given by the Minister of State, Home Office.

Mr. Speaker: Points of order are normally taken after statements. Unless the hon. Member feels that the matter is pressing, perhaps he will wait until the customary time.

Mr. Buchan: It would perhaps be preferable to raise the matter now, as it relates to questions.
The Home Secretary said that the Government had no intention of changing the policy on the rights of hon. Members to make representations on behalf of their constituents but that it was a different question in relation to other constituencies. The Minister of State later referred to the fact that an hon. Member may take up a constituent's case that had been deserted by the hon. Member for that constituency.
My constituency contains an airport, as do constituencies of other hon. Members. Immigration organisations frequently contact us and sometimes immigration officials make recommendations, and we often have only a short time to act. Hon. Members are also frequently known to have special knowledge of particular areas of the world. For example, cases from Chile are often referred to me.
The matter concerns the rights and duties of hon. Members, and we require


your protection, Mr. Speaker. If the policy that was apparently suggested is to be implemented by the Government, it will prevent hon. Members from exercising their rights and democratic duties, and I ask for your guidance.

Mr. Alexander W. Lyon: Further to that point of order, Mr. Speaker. I was a Minister in the Home Office and know about the customs of that Department. There is a convention in the House that hon. Members do not take up cases from other constituencies, but it exists only between hon. Members and has nothing to do with the Executive. The Executive are not entitled to declare that an hon. Member should not take up a case from another constituency.
You are the defender of hon. Members against the Executive, Mr. Speaker, and I hope that you will make it plain that it is not for the Home Secretary to seek to take away the right of an hon. Member to take up a case from another constituency. It is for the House and not for the Executive.

The Secretary of State for the Home Department (Mr. William Whitelaw): Further to that point of order, Mr. Speaker. If I did not make myself clear, I believe that I should do so now. In my 25 years in the House, I always understood that it was a condition and

a principle amongst hon. Members that we did not interfere with cases in each other's constituencies. That is what I was saying. Of course I understand that there may be exceptional cases. I think that I used the word "normally". I was never at any time stating what the Executive thought. The Executive have no power in the matter. I thought that I was stating what had been the practice amongst hon. Members for a long time.

Mr. Speaker: Order. I understand that there is to be a major statement after business questions. The relationships and codes of conduct amongst hon. Members are not for the Chair but for hon. Members to observe. However, if necessary, I shall look into the matter and make a statement.

Mr. Heffer: Further to that point of order, Mr. Speaker. The hon. Member for Liverpool, Edge Hill (Mr. Alton) was on holiday for a fortnight and I took up a case in his constituency. Had I been on holiday, he might have done the same for me. It is utterly ridiculous for the Home Secretary or any Minister from the Home Office to complain because hon. Members are doing their jobs and looking after the people of this country.

Mr. Speaker: Order. There is no point in pursuing that matter. I said that I would look at it, but I doubt whether it is my concern.

BUSINESS OF THE HOUSE

Mr. Foot: May I ask the Leader of the House to state the business for next week?

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): The business for next week will be as follows:
MONDAY 19 NOVEMBER—Second Reading of the Civil Aviation Bill.
TUESDAY 20 NOVEMBER—Second Reading of the British Aerospace Bill.
Remaining stages of the Charging Orders Bill [Lords].
WEDNESDAY 21 NOVEMBER—Debate on EEC documents 9093/79, 9369/79, 9721/79 with Addendum 1, COM(79)620 Final, 9250/79 and related unnumbered documents—fortunately—on the general budget of the European Communities.
THURSDAY 22 NOVEMBER—Supply [6th Allotted Day]. The subject for debate to be announced later.
FRIDAY 23 NOVEMBER—Private Members' Bills.
MONDAY 26 NOVEMBER—Second Reading of the Transport Bill.

Mr. Foot: I have two matters to raise. First, we should naturally welcome a statement to the House either tomorrow or Monday on the Zimbabwe-Rhodesia conference. Secondly, in the light of the statements made this morning and the Chancellor of the Exchequer's projected statement this afternoon, I presume that the Government will be rearranging at least one day's business next week to provide for a discussion of those measures in Government time.

Mr. St. John-Stevas: On the first point, I shall pass on the request to my right hon. Friend the Lord Privy Seal. On the second, an Opposition Supply day may be thought appropriate for a general discussion on economic policy.

Mr. Foot: May I disillusion the right hon. Gentleman right away? There are many individual crimes and misdemeanours committed by the Government that we shall quite properly wish to discuss on our Supply days, but when a Government introduce measures of a far-

reaching nature, affecting the employment of our people and the entire economy of the nation, we expect the Government to provide time next week for debate.

Mr. St. John-Stevas: That matter could perhaps best be discussed through the usual channels. I am not unaware of the point that the right hon. Gentleman is making.

Mr. Farr: Can my right hon. Friend tell us whether there will be time next week to discuss the motions that have been lurking on the Order Paper for some time relating to the establishment of the 14 Select Committees? It is apparent that not all the names submitted were placed before the Committee of Selection, and certain other matters should also be looked into.

Mr. St. John-Stevas: It is right that those actions should not be lurking but should be emblazoned on the Order Paper for a sufficient period before they are moved, so that hon. Members may have the opportunity to consider the names. I am glad to be able to give my hon. Friend an answer that is better than the one he anticipated. The House will have an opportunity tomorrow to come to a decision on the motions.

Mr. Joseph Dean: Will the Leader of the House use his influence tomorrow to prevent the Government blocking my Private Member's Bill, which attempts to deal with the appalling conditions in some hostels? Does not the right hon. Gentleman think it peculiar that tomorrow the Government will give assent to the passage of two Bills dealing with the welfare of animals—with which I agree—but are prepared to block a Bill dealing with the welfare of human beings? Some people live in far worse conditions than animals. Will the right hon. Gentleman use his influence to make parliamentary time available for this worthwhile Bill?

Mr. St. John-Stevas: I am sure that the hon. Gentleman's Bill is interesting and worth while. However, the conditions that he seeks to deal with by a Private Member's Bill are already subject to other legislation. It is a matter of legitimate debate whether a further Bill is necessary

Mr. Kilfedder: Will the Leader of the House tell the House when the White Paper on the proposed Northern Ireland


conference will be published and when it will be debated? Will he arrange with the Secretary of State for Northern Ireland for the Northern Ireland Committee to be able subsequently to debate the White Paper in Stormont, so that the Ulster people can be close to what is going on?

Mr. St. John-Stevas: I hope that the White Paper on Northern Ireland will be published towards the end of the month and that there will be a debate in the House shortly thereafter I will pass on to my right hon. Friend the Secretary of State for Northern Ireland the hon. Gentleman's suggestion about the arrangements for Northern Ireland.

Mr. O'Neill: Will the Leader of the House find time as soon as possible for a discussion on the announcement about the rate support grant that will be made tomorrow by the Secretary of State for the Environment? Will he ensure that that will take place during the day and that it will not be pushed through in the middle of the night, as has happened in the past?

Mr. St. John-Stevas: The announcement will be made in the customary manner. No doubt it will be relevant to a general debate on economic affairs.

Mr. Alton: The Leader of the House gave an assurance a week ago that he would read the committee of inquiry's report into the death of Darryn Clarke and decide, from his reading of it, whether there should be time for a parliamentary debate on it. Has he reached any conclusion?

Mr. St. John-Stevas: I have looked into that very tragic case. The matter is being studied, but I cannot offer time for a debate. Perhaps it would be appropriate to raise it in an Adjournment debate.

Mr. Ian Lloyd: The Leader of the House, who is exceptionally well informed in these matters, will be aware that a major national debate is taking place on television and in the specialised press—even the national press—on the influence on British industry of semi-conductor technology. Does he agree that it is time to have a full-scale debate on the subject in the House?

Mr. St. John-Stevas: Not next week.

Mr. Gordon Wilson: Is the Leader of the House aware that even before the Government's calamitous announcement of today the Scottish economy has been in serious difficulties, with redundancies and closures constantly taking place? Will he note that apart from two debates at the instance of the SNP no major debate on the Scottish economy has been held since 1973? Accordingly, will he make arrangements for such a debate, in view of the disastrous position of my country?

Mr. St. John-Stevas: The Government share the concern of a number of hon. Members about the high level of unemployment in many areas of Scotland. I have seen the hon. Gentleman's motion on the Order Paper. I shall discuss the matter with my right hon. Friend the Secretary of State for Scotland.

Mr. Jay: Is it not essential to have a full day's debate next week on the failure of the Government's economic policies?

Mr. St. John-Stevas: It is a matter of opinion and value judgment whether the policies have failed or are on their way to success. I suggest that the right hon. Gentleman awaits the statement that will be made by my right hon. Friend the Chancellor of the Exchequer.

Mr. Eldon Griffiths: Bearing in mind the need for the British people to understand the necessity for deploying theatre nuclear missiles in this country, will my right hon. Friend ensure that there is a debate in the House after the NATO decision so that the Government may take advantage of the reasons why it is necessary, in the hope of achieving united public will?

Mr. St. John-Stevas: I shall consider my hon. Friend's important point.

Mr. Dormand: Does the Leader of the House recall writing to me recently refusing to convene the Standing Committee on regional affairs? The Committee has not been called during this Session and has been unable to discuss the state of the Northern region. Does the right hon. Gentleman recall that the reason that he gave was that the report that my Northern colleagues and I wish to discuss was written before the Government came to power? Is he aware that since the Government came to power


matters in the Northern region have become so much worse that we need a debate not only in the Committee but also on the Floor of the House?

Mr. St. John-Stevas: I recall that letter. If I had forgotten it, the hon. Gentleman has already been kind enough to remind me of it. I shall consider the matter again and write to him.

Mr. Wigley: Will the Leader of the House tell the House when the Government intend to table the orders under the Pneumoconiosis, etc. (Workers Compensation) Act? They were expected to be tabled in October and payment was expected before the end of this month. Will he assure us that they will be tabled next week and that a statement will be made?

Mr. St. John-Stevas: I will look into the matter, but I cannot say that the orders will be debated next week.

Mr. Adley: Has my right hon. Friend noticed that last Thursday the right hon. Member for Cardiff, South-East (Mr. Callaghan) was sitting opposite my right hon. Friend the Prime Minister during Prime Minister's Question Time and last Tuesday it was the turn of the right hon. Member for Leeds, East (Mr. Healey), whereas today we have the right hon. Member for Ebbw Vale (Mr. Foot)? In view of the large sums of public money that are made available to Opposition parties, does my right hon. Friend think it time that we had a statement from them about where the money is going and who is spending it?

Mr. St. John-Stevas: The right hon. Member for Ebbw Vale (Mr. Foot) is a good substitute for anybody.

Mr. Dalyell: Does the Leader of the House recollect that he undertook last July that there would be a debate on the Goodman report on charities before Christmas? Is that still a possibility?

Mr. St. John-Stevas: It is a possibility. I cannot say that it is a probability, but I retain hopes in the matter.

Mr. Alan Clark: If the House is to debate the stationing of theatre nuclear weapons in this country would it not be more significant to debate the subject before the NATO meeting rather than after it?

Mr. St. John-Stevas: I will consider that point.

Mr. Cryer: I endorse the view that there should be a debate in the House on the proliferation of nuclear weapons. We see so much of the subject on television, with the Secretary of State for Defence appearing from time to time. Does not the right hon. Gentleman believe that a free society might usefully debate its compulsory mass suicide by computer misuse by half a dozen technicraftsmen, as occurred last weekend?

Mr. St. John-Stevas: As my right hon. Friend the Member for Yeovil (Mr. Peyton) suggested last week, this is an important subject. It is certainly fit for debate in the House. However, timing has to be considered. In view of the debates that are going on in the United States on SALT II, we need to get our timing right. Nevertheless, I shall consider the hon. Gentleman's point.

Mr. Michael McGuire: Will the Leader of the House tell us when we can expect a debate on the Floor of the House about the North-West? Will he clear up a misunderstanding that arose last week when I asked him about the regional affairs Committee? He seemed to indicate that it existed in a state of limbo—a theological term that he will appreciate. I would like to know when we can expect them to be resuscitated and if he will consider placing the North-West at the head of affairs, with, as I suggested last week, a suitably anodyne debate on the disastrous consequences of the Government's expenditure cuts on the North-West.

Mr. St. John-Stevas: I hope that the problems of the North-West can be debated in the wider context of the economy. I cannot promise an early debate on the subject that the hon. Gentleman mentions. With regard to the regional affairs Committee, I have already said that I will look into the matter again. I understand that limbo has been officially abolished.

Mr. Speaker: Order. I propose to call the hon. Member for Orpington (Mr. Stanbrook) and three hon. Members from the Opposition Benches, who have been rising, before we move on to the statement.

Mr. Stanbrook: Since the draft of the new immigration rules was attached to


the White Paper published this week, may we assume that the rules themselves will he made immediately after the debate on the White Paper?

Mr. St. John-Stevas: The two are clearly connected. It is important to have the debate on the White Paper first, followed by the publication of the rules.

Mr. Kilroy-Silk: Will the Leader of the House say when we can expect the promised statement on the Government's policy on jury vetting? Will he also say when there will be an opportunity to debate the reports of the May committee and of the Expenditure Committee on the prison system?

Mr. St. John-Stevas: I will consider what the hon. Gentleman said with regard to the two reports that have been published. With regard to jury vetting, my right hon. and learned Friend the Attorney-General told the House earlier this week that consideration of the matter is continuing within his Department.

Mr. Skinner: Now that the Government are engaged in a series of U-turns, can the Leader of the House arrange for Ministers in the Department of Trade to make a statement on the number of quangos that are now being brought

forward for the Government? Perhaps the two Ministers can give the names of the chairman and other representatives of this quango—the Commission for Pilots—so that the House may be fully informed what the Government are doing in this direction.

Mr. St. John-Stevas: The Government have set an impressive example by the number of quangos that they have abolished. As for making a series of U-turns, I point out to the hon. Gentleman that if one went through that manoeuvre one would end up in the position where one started.

Mrs. Reneé Short: Last week I reminded the right hon. Gentleman about the need to debate the report of the Royal Commission on the National Health Service. He made certain promises. Will he look at the replies given by his right hon. Friend the Home Secretary about the need to debate the May report and add that report to the list that should be debated in the House before Christmas?

Mr. St. John-Stevas: I shall certainly bear that in mind. The difficulty is that there are a number of important reports all of which have claims to be debated in the House. They will have to be taken in some order of priority.

MONETARY POLICY

The Chancellor of the Exchequer (Sir Geoffrey Howe): With the permission of the House, Mr. Speaker, I should like to make a statement on monetary policy.
The figures for October, just published, show that sterling M3 grew by 2 per cent. in that banking month. The growth since mid-June, the beginning of the target period, has been equivalent to just over 14 per cent. a year. Although the figure for banking in October was erratically high, it is clear that the underlying growth of sterling M3 is still significantly above the target of 7 per cent. to 11 per cent. There have been two principal causes of this excess: a higher than expected public sector borrowing requirement in the first half of the year, and the persistently high level of bank lending.
Because of the timing of the Budget measures—in particular receipts from VAT and reductions in public spending—the PSBR was always expected to be higher in the first half of the year than in the second. In the event, the PSBR in the first half year has been further increased by strikes and other industrial action which have delayed the collection of value added tax and telephone bills. At the peak, arrears on telephone bills are expected to reach £1 billion. A large part of these arrears will be made good in the second half-year. Even so, the best estimate which could now be made of the PSBR for the year as a whole, if no action is taken, is that it would be about £9 billion compared with the £8·3 billion Budget estimate.
The monthly growth of bank lending has averaged about £700 million over the last quarter. Although the timing is difficult to predict, its growth can be expected to fall in due course. Nevertheless, it is necessary to take action now to bring the growth of the money supply within the target range. The Bank of England accordingly announced this morning, with my approval, that minimum lending rate would be increased to 17 per cent. This goes beyond the rise in market interest rates at home and demonstrates the Government's determination to act with the firmness foreshadowed by my right hon. Friend the Prime Minister earlier this week.
The House will realise that interest rates overseas have risen sharply as other countries have moved to fight inflation by limiting monetary growth. In the United States, for example, prime rates have risen from 11½ per cent. to l5½: per cent. since the summer.
In addition to sales of gilts, we intend to secure further funding of the PSBR through national savings. The limit on holdings of the index-linked national savings certificates retirement issue will be increased next month from £700 to £1,200. A new ordinary national savings certificate will be introduced early next year. The interest rate on the National Savings Bank investment account will be raised to 15 per cent. from 1 January next.
Although much of the increase in the estimate of this year's PSBR is due to the timing of receipts, further action is required to bring the PSBR down. In the light of this, we shall require oil companies to make a payment on account of petroleum revenue tax at the time when they make their returns. This will have the effect from now on of advancing the due date for collection by two months, thus bringing the arrangements for PRT into line with those for collecting royalties. This will ensure that PRT reaches the Exchequer with the minimum of delay at a time when oil prices are rising.
The Bill to achieve this will be introduced shortly. It will reduce this year's PSBR by £700 million and thus bring the estimated level back to the original Budget figure of £8·3 billion. It will also yield an extra £300 million next year, in addition to £400 million or so from the deferred payment of telephone bills
I set in hand some months ago a review of methods of controlling the growth of the money supply. The main instruments must continue to be our public expenditure and tax policies, which together determine both the size and the composition of the PSBR, and interest rate policies. Recently, the supplementary special deposits scheme, or corset, has also played a part in monetary control. I am well aware of the limitations of this scheme and do not believe that it has a permanent role to play. Nevertheless the Governor and I have agreed that it is right that it should continue for a further six months. The Bank announced the arrangements this morning.
In the future, other techniques, including one of the variants of monetary base control, could play a useful without the disadvantages of the SSD scheme. The Bank and Treasury will therefore shortly issue a discussion paper for consultation. I must, however, stress that no such scheme can avoid the need for the right fiscal and interest rate policies. Indeed, one of the possible advantages would be to improve the response of interest rates to monetary conditions.
Finally, I am extending the period covered by the present target range for sterling M3 of 7 per cent. to 11 per cent. per annum. That target at present applies to the 10 months from mid-June 1979 to mid-April 1980. It will now cover the 16 months from mid-June to mid-October 1980. The effect will be to avoid building into the target for the new period the excess growth of the money supply in the recent past, while allowing a reasonable period in which to offset that excess.
Britain's future depends, above all, on mastering inflation. That can be done, as the right hon. Member for Leeds, East (Mr. Healey) well knows, only if we bring the money supply under firm control, progressively reduce the rate of monetary growth over the years and pursue the most rigorous restraint on public spending. The supposed alternatives to these policies are a delusion. None of those alternatives would be responsible and none would be sustainable. The action that I have taken today underlines the Government's total and continuing commitment to getting inflation down.

Mr. Healey: Is the right hon. and learned Gentleman aware that the measures that he has just announced will mean that millions of our fellow citizens will face the unhappiest Christmas on record? Is he aware that a Government who rely exclusively on monetary policy have proved totally incompetent even at that and that, as a result, the British people now face the highest interest rates and mortgage rates in our history and the possibility of a further rise in mortgage rates in the new year? The House will want a full-scale debate in Government time on these matters.
I hope that the right hon. and learned Gentleman can assure us that he will shortly be publishing the mid-year fore-cast, that it will include an estimate of the PSBR in the coming year and will

make clear that, thanks to the fall in output engineered by the Government, public expenditure as a percentage of gross domestic product, even after the cuts, will still be higher next year than this year, contrary to what the Prime Minister told us it should be on Tuesday.
Government policies will push the inflation rate up to 20 per cent. or higher in the new year. Is the right hon. and learned Gentleman satisfied that a minimum lending rate of 17 per cent. will achieve his objective on the money supply, since it is bound to be a negative interest rate when inflation rises to that level?
The abolition of exchange control has opened a gaping loophole in the Government's control of monetary policy. Will the right hon. and learned Gentleman explain how, weeks after he announced the abolition of exchange control, he and the Bank of England have still failed to agree on how to plug that loophole? Why is he keeping the corset still in place when it is well known throughout the financial community that its worth is absolutely useless now that he has abolished exchange control?
Why has the right hon. and learned Gentleman taken no action in this mini-Budget on credit cards and Access cards, as private borrowing is the main cause of the monetary problems now facing him?
How does he propose to protect millions of householders, particularly small families, against a further increase in mortgage rates in January?
How does he propose to help the thousands of small businesses that now face bankruptcy as a result of this blow to their financial viability?
Has the right hon. and learned Gentleman yet made an estimate of the further increase in unemployment that will follow this tightening of the cash position of British companies?
Finally, for how long will Conservative Members allow the nation's economic prospects to be ruined by a bunch of bungling doctrinaires?

Sir G. Howe: I do not intend to compete with the right hon. Gentleman in discussing the quality of the Christmases over which he presided when he was at the Treasury. I shall take in order the serious questions put by the right hon. Gentleman.
First, we shall certainly be publishing the forecast for next year at the appropriate time as required by the Industry Act. When we consider the right hon. Gentleman's suggestion that the Government have engineered or presided over a fall in output, we begin to see the quality of his comments. It is high time that he realised, as the country realises, that declines of that kind are the consequences of the condition of the economy over which he presided when he was at the Treasury. The right hon. Gentleman also understands the extent to which continuing shortcomings in our industrial performance are caused by recurrent irresponsible industrial strike action instead of a willingness to improve productivity.
If, as the right hon. Gentleman suggested, public expenditure next year were to be a larger proportion of our gross domestic product, I hope that he would join us in the continuing and necessary task of reducing that burden of public expenditure, which is what we are determined to do.
The right hon. Gentleman knows that these problems are nothing to do with the modest expansion of credit attributable to the use of credit cards but concern the continuing size and burden of public spending. That is why it is important that it be reduced.
The right hon. Gentleman suggested that exchange control may or may not have had something to do with these matters. The monetary figures underlining the decisions that I have announced today accrued before the decision to modify exchange control was announced. As regards exchange control, I am delighted to stand on the judgment given by the former Member for Manchester, Central, now Lord Lever, who, in his maiden speech in another place, said that, speaking as a member of the Labour Party and of the former Government, he welcomed the end of this exchange control, which had served no useful purpose and the abolition of which could be a considerable encouragement to a great trading, insurance and banking nation like ours.
Finally, protests by the right hon. Gentleman about the Government's determination to take the necessary decisions to assert and carry through effective control of monetary policy come ill from

him. I remind him of what he said to the House just over 12 months ago:
If the Government were to … fail to take timely action when necessary and lose control of the money supply, the sufferings of the whole of the British people … would be infinitely more serious than suffering brought about by increases in mortgage rates".—[Official Report, 9 November 1978; Vol. 957, c. 1233.]

Mr. Healey: Would the right hon. and learned Gentleman answer two of the questions that I put to him? First, will the mid-term forecast be published next Tuesday, as the press has been led by the Treasury to expect, and will it include a forecast of the PSBR next year? Secondly, the Government proved incompetent at controlling the money supply even before the abolition of exchange control. The point that I put to the right hon. and learned Gentleman was that the abolition of exchange control would make the problem still more difficult. What does he propose to do about it?

Sir G. Howe: I propose to take the necessary action that I have announced to ensure continuing and effective control of the money supply. There has been a developing case over a number of years for examination of the methods of control of the money supply. That is why I set in hand the inquiry to which I referred in my statement. But it would be unwise to proceed at a faster pace than we are going in that respect.
The statement under the Industry Act will be published in due course.

Mr. Healey: Will it include the forecast of the PSBR?

Sir G. Howe: The right hon. Gentleman will find out in due course when the statement is published.

Mr. Maurice Macmillan: First, to what extent is control of the money supply made harder by the fact that there is no restriction on acceptances and the degree to which clearing banks, by accepting paper, can, in effect, lend without doing so directly? Secondly, am I right in thinking that there is about £1·7 billion of acceptances outside the banking sector which is perhaps increasing the money supply by about 2 per cent.?
Thirdly, would it not be right to assume that the extent to which people could borrow from abroad, because of the lack of exchange control, is less effective than


the right hon. Member for Leeds, East (Mr. Healey) would think, because the foreign banks have to find sterling somewhere, and that probably means obtaining it from British banking institutions?

Sir G. Howe: I am grateful for my right hon. Friend's comments in the second part of his question.
Acceptances are taken into account in the measurement of the money supply at the present time. If we were to seek to act directly to control them, the result would be a further variation and distortion in the system. Therefore, there would be no purpose in acting separately on that account. That is one of the factors that must be taken into account in this country, as in others, in continuing to develop the techniques by which we measure and control the money supply.

Mr. David Steel: Does the Chancellor recognise that the principal criticism levelled at his economic policy is that he is relying wholly and exclusively on control of the money supply as the weapon for controlling inflation? Has he not yet reflected on the folly of abandoning any attempt to introduce a policy on increases in prices and incomes? Since he is anxious to create an incentive economy, how does he expect business men to respond to an improvement in their personal tax returns when they must now go to the market to raise money for their businesses at a rate of around 20 per cent.?

Mr. Skinner: The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) tells a different story every week.

Sir G. Howe: In response to the last point made by the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), action of this kind is necessary in order to establish, in the long term interests of business, effective control of inflation. Businesses would find it much more difficult if this kind of action were not taken in time. It is remarkable that the need for firm and early action of this kind is widely supported by those in small and large businesses. Business men recognise the Government's determination to bring inflation under control. The right hon. Gentleman persists in repeating the canard that we are relying solely on monetary policy to defeat inflation. That is not so. As a crucial part of supporting monetary policy, we are implementing

fiscal policy and policies to control and reduce the rate of public expenditure.
We recognise, and continue to assert, the necessity for those responsible for pay bargaining to conduct their affairs in a way that is consistent with the growth in the money supply. We do not believe that it is right, in the light of the experience of successive Governments, to intervene for direct regulation of income growth and bargaining. Experience has shown that that sows the seeds of its own destruction. It is therefore necessary for those involved in pay bargaining to understand the imperatives that follow from the implementation of an effective policy for the control of money supply. Both sides of industry have a high responsibility for ensuring that their pay bargains recognise the actual resources, increased performance and productivity in the firms in which they are employed. They ignore that lesson at their peril.

Mr. Donald Stewart: Is the right hon. and learned Gentleman aware that his announcement will stoke inflation, which will now go like a forest fire? What will happen to the desirable policy, advocated by the Prime Minister, of encouraging more home buyers? Will the Government now assist them to pay the mortgages that they can no longer afford?

Sir G. Howe: Home buyers, like other members of the community, would not profit by a failure to control the rate of growth in money supply. The effective remedy, in that respect as in every other, is to bring money supply growth under control. No service whatsoever is done to the British people by ignoring that lesson.

Mr. Cockeram: Will the Chancellor of the Exchequer accept that it was a mistake to stabilise the level of Government expenditure in his recent White Paper, which took last year's level—established by a Socialist Government—as its starting point? Does he agree that cuts will have to be made? Will he make a start with the rate support grant by not maintaining it at the previous Socialist level of 61 per cent.? Does he agree that otherwise it will be seen that "the party" is continuing?

Sir G. Howe: I am grateful to my hon. Friend for underlining the continuing need


to scrutinise the rate, the pattern and the size of public expenditure. The imperative need to carry that task through the years ahead will be with us throughout that time. My hon. Friend must await the announcement on the rate support grant by my right hon. Friend the Secretary of State for the Environment.
My right hon. Friend will certainly need to take into account the fact that the rate support grant will be setting down the limits within which total local authority expenditure—including local authority pay bargaining—will have to be undertaken. Those responsible for those matters will have to accept the same need for restraint as others who are trying to live with a sensible monetary policy.

Mr. Joel Barnett: In the Budget, the Chancellor spoke of the need for a new beginning and said that he would achieve his monetary targets without curbing the private sector. What is he doing now?

Sir G. Howe: We are continuing to achieve those monetary targets as swiftly and effectively as possible. Of course, it will be more and more easy to achieve those targets with less discomfort to the private sector if we maintain the battle against excessive public spending. I am grateful for the candour with which the right hon. Gentleman said, not long ago, that if borrowing and taxation reached a point beyond which it was not feasible to go it would be necessary to restrict public expenditure. I hope that he continues to hold that view. We look forward to the courageous and candid support of the right hon. Gentleman for many years.

Mr. Neubert: Does my right hon. and learned Friend agree that not the least factor in our present problems is the expansion of public spending unleashed earlier last year by his predecessor, at a time when he thought that the general election would be held in the autunm?

Sir G. Howe: My hon. Friend is entirely right. One of the first things to which we had to address ourselves on coming into office was the containment and reduction of the massively expanded public expenditure plans on which the previous Chancellor and his friends had so irresponsibly embarked before the general election.

Mr. Skinner: Is the Chancellor of the Exchequer aware that when his side-kick reported on the cuts in public expenditure a few days ago he announced that approximately 300,000 more people would be thrown out of work as a result of that policy? Will the Chancellor specifically answer the questions put to him by my right hon. Friend the Member for Leeds, East (Mr. Healey)? Will he come clean and tell the House how many more people will be ruined and put on the pile of human misery known as the dole queue as a result of that statement?

Sir G. Howe: I am grateful to the hon. Member for affording me the opportunity of correcting his misunderstanding about my right hon. Friend's statement. My right hon. Friend did not tell the House that there would be an increase of 300,000 in unemployment as a result of the measures that he announced to the House.

Mr. Skinner: Twisting again.

Sir G. Howe: Will the hon. Gentleman be patient enough to listen to my reply? What my right hon. Friend said was that one of the working assumptions underlying the White Paper was that unemployment would be higher to the extent of 300,000 next year. That is not in consequence of the White Paper. It is nevertheless a fact to which the House must reconcile itself, that unless we are able, by all our policies, to secure better performances in our industrial and manufacturing sectors it will be very difficult to avoid an increase in unemployment of that order. The Government's policies, including fiscal policies and our determination to control public expenditure, are designed to make our economy the better able to fight rising unemployment.

Mr. Healey: May I press the right hon. and learned Gentleman on this matter? Even if one accepts that what his right hon. Friend meant was something different from what he said, the fact is that as a result of all Government policies—according to the right hon. and learned Gentleman—unemployment will rise by 300,000 next year. By how much further will that figure rise as a result of the collapses in private industry following the measures that he has announced this afternoon?

Sir G. Howe: I am astonished that the right hon. Gentleman should seek to


perpetuate that falsehood about my right hon. Friend's statement. [HON. MEMBERS: "Answer the question."] I am endeavouring to answer the question and will do so if Opposition Members will do me the courtesy of listening to what I am saying.
The right hon. Gentleman, who was Chancellor of the Exchequer not long ago, knows perfectly well that at the time when he published his public expenditure White Papers they contained a working assumption about the likely level of unemployment in the year ahead. The figure about which my right hon. Friend was asked when he made his statement was precisely that assumed figure. He told the House that the working assumption was for an increase of 300,000. What he did not say, and what was not implicit in his statement, was that that figure was a consequence of Government policies. That working assumption remains exactly the same.
The right hon. Gentleman and his hon. Friends must understand that the prospect of unemployment in the year ahead and thereafter depends on the willingness and capacity of the people to turn away from irresponsible industrial action and to work together to improve productivity and the performance of our economy. They must recognise that we are long past the point when people should believe that each and every thing that happens in our economy can be influenced by direct Government action.
We are creating conditions under which it will be easier for the British people to improve their economic performance. On that we must concentrate in the years ahead.

Mr. Lawrence: Is my right hon. and learned Friend able to quantify the exact effect of the disastrous engineering strike upon the economy?

Sir G. Howe: The engineering strike was one of a number of strikes that had a substantial impact upon the performance of industry. It added substantially to the growth of bank lending in order to protect firms which had to resist such industrial action. Each action of that kind contributes directly to the dangers that our people face. We must understand that reponsible industrial conduct has as much a part to play in improving

our economic performance as anything that is said in the House.

Mr. Robert Sheldon: Is the Chancellor of the Exchequer aware of his addiction to untested theory? What does he intend to do if this experiment fails? What will he do if inflation continues to rise, if unemployment rises even higher than the estimate, and bankruptcies rise still further to horrifying levels? What contingency plans do the Government have in the event of failure?

Sir G. Howe: The policies that we are pursuing are consistent and coherent. They will be sustained. They are policies for the control of the rate of growth in the money supply, the control of public expenditure, the restoration of incentives, and the restoration of balance in our industrial society. We have been in office for six months and the Opposition have been on the Opposition Benches for the same time. They have proferred no alternative policy.

Mr. Latham: Can my right hon. and learned Friend confirm that today's announcement will have its effect on the future output of the economy? Does he accept that as a result the figures for cash limits in part II of the public expenditure White Paper will have to be revised? Will he confirm that whatever else we need we need no lectures on the economy from the man under whom inflation rose to 25·6 per cent.?

Sir G. Howe: I agree with my hon. Friend's last point. He will have to wait until the cash limit figures and the remainder of public expenditure plans are published, in due course.

Mr. Arthur Lewis: Have the same Treasury nuts advised the Chancellor as advised my right hon. Friends? I meant to say "knights", but a slip of the tongue often speaks the truth. Have those nuts or knights given the Chancellor of the Exchequer any idea what will happen if his proposals are successful, or if they are not? Can the Chancellor say whether unemployment figures will go up or down, and whether the rate of inflation will go up or down?

Sir G. Howe: The hon. Member must understand that a large part of the answer to both those questions depends upon how


far those who are responsible for management and trade union negotiations understand the facts of economic life. A crucial part of Government responsibility is to maintain control of the money that is available. Equally, a crucial part of the role of those involved in industry is to avoid strike action, to avoid industrial disruption and to achieve pay settlements that are consistent with the growth of productivity and the maintenance of employment. If people bargain in a pattern that is consistent with the policies that I have laid down the future for both employment and inflation will be more hopeful.

Mr. Bruce-Gardyne: May I congratulate my right hon. and learned Friend on a wise and courageous statement? Does he agree that his task of financing this year's PSBR in a non-inflationary manner might be facilitated if he restated publicly and as quickly as possible his intention to achieve a lower target figure for PSBR in money terms next year? Will the Chancellor also tell the House what the achievement at the top end of the sterling M3 money supply target for the next 12 months will mean in terms of sterling M3 growth over the whole of the current 16 months?

Mr. Skinner: The Chancellor should not forget that his hon. Friend is after his job.

Sir G. Howe: I shall take up the last question of detail afterwards. I am responding for the third time in almost the same number of weeks to my hon. Friend's question about the PSBR next year. We take account of the point that he makes. Our plans will be announced in due course.

Mr. Speaker: I propose to call four more hon. Members from either side. Mr. John Hunt.
I apologise to the House. I think that I have lost the balance, but I shall make up for it later.

Mr. John Hunt: Does my right hon. and learned Friend agree that credit cards represent an open invitation to overspend? Did he see an advertisement last night in a London evening newspaper by a leading multiple store offering an instant £240 on the basis of repayments of £10 a month? Is that not a major factor in

the growth of money supply? Should not something be done to curb it?

Sir G. Howe: That is a matter about which my colleagues and I have been concerned, and we have made a number of inquiries about it. Personal lending, including credit cards and similar devices, is less than one-sixth of total bank lending—a small proportion. The contribution made by credit cards as part of that proportion is even smaller.
Experience with previous patterns of direct control suggest that if one controls this or that type of credit new and more sophisticated types of credit are created. We must remember that credit card lending, like any other, is subject to the consequences of a higher lending rate. It becomes more expensive and borrowing on a credit card is already an expensive way of borrowing. I shall bear in mind the anxiety that has been expressed. However, I should not like the House to believe that we are likely to discover a special method of dealing with that form of credit.

Mr. Dalyell: Does the Chancellor think that it is wise to have dismantled exchange rate controls? Even at this eleventh hour and fifty-ninth minute, is it too late to preserve the mechanism which he may need?

Sir G. Howe: I have no reason to question the wisdom of the policy change referred to by the hon. Member. I take comfort from the glowing tribute by Lord Lever and from the fact that most people regard the abolition of exchange control as a significant contribution to the capacity of the country to use its resources more effectively. I have no reason to change that view.

Mr. Jay: Is it not clear that in all the circumstances the abandonment of exchange controls was a reckless and disastrous blunder?

Sir G. Howe: From the right hon. Gentleman's long tradition of believing that the gentlemen in Whitehall know best, he would believe the abolition of any control to be a reckless and disastrous blunder. The abolition of exchange control represents a sensible change in policy which brings us into line with many other countries. It lays the foundation for the more effective use of the nation's resources.

Mr. Robert Taylor: Does my right hon. and learned Friend agree that much of the increase in private sector borrowing is used to finance stock increases to avoid corporation tax? How long is he prepared to allow that to continue?

Sir G. Howe: That is an issue of legitimate importance. It is one of the factors underlying the decision announced in my Budget Statement to undertake a review of the entire pattern of corporation tax. That review is continuing.

Mr. Anderson: Will the Chancellor of the Exchequer dare to contrast the near ecstasy with which his first Budget was greeted by his hon. Friends with the current gloom and the fast-emptying Tory Benches? Is this the incentive that he promised private industry? What is the working assumption for industrial investment in the next year as a result of this package?

Sir G. Howe: I am quite certain that failure to introduce such measures would have gravely worsened working assumptions for industrial relations and other aspects of the economy. Such action is and was essential to restore the monetary balance. It is only under a Government who have the courage to take such action that we can look forward to restoring this country to prosperity.

Mr. Kenneth Lewis: Is my right hon. and learned Friend aware that what he has announced today will undoubtedly have a tremendous effect on the private sector? Is he satisfied that in the public sector, through the measure that he has announced or through any other measures, he can hold back what many believe will be wage and salary rises that are far too high?

Sir G. Howe: My hon. Friend is entirely right to draw attention to the continuing danger of pay claims that are excessive by any standards in the public as well as the private sector. The measures that I have taken are necessary to control the total resources of money available to meet those claims. Those who are conducting pay bargaining must recognise that if they press their claims too far they increase the chances of unemployment increasing, and destroy the chance of advancing prosperity.

Mr. Campbell-Savours: Would not the right hon. and learned Gentleman accept that there is a lesson in his statement for both Front Benches in this House, namely, that traditional solutions will not resolve these traditional problems and that if the objective is to be growth it would be well if the Government were to accept the need for a change, in terms of a transformation in the relationship between capital and labour, because that is at the root of the problem?

Sir G. Howe: I am sure there is lesson not just for both Front Benches but for Front and Back Benches on both sides of the House, namely, that it is not sufficient for a Government to take the steps which this Government are taking—the action that they can take—to control the central features of the economy; but that it is important, as the hon. Gentleman puts it, for relationships between capital and labour to be transformed in the direction of common sense. If those who are conducting negotiations between capital and labour recognise the extent to which they can destroy their jobs, their firms and their futures by irresponsible action, and instead behave in a sensible fashion, devoted to raising productivity and improving job security, a great transformation would indeed follow. If the hon. Gentleman would join us on the Government side of the House in preaching the cause of industrial responsibility, no one would be happier than I.

Mr. John H. Osborn: The right hon. Gentleman the Shadow Chancellor raised the question of public expenditure as a percentage of the gross national product. Is my right hon. and learned Friend aware that trade unions and Socialist councils from South Yorkshire are coming to the House next week to urge a further increase in public expenditure? Would he comment on that, and would he explain the extent to which this dilemma is due to the failure of an incomes policy last winter?

Sir G. Howe: My hon. Friend is right to remind the House of the extent to which many of the problems that we have inherited are the result of the failures of the last Government in the winter of discontent through which we then lived. He is also right to remind us that the


question that we should be constantly addressing to hon. Members on the Labour Benches is whether they are criticising us today for taking action to reduce public borrowing or public spending, or, on the other hand, for not spending enough. The dichotomy in policy on the part of the Labour Party has to be resolved. I hope very much that Labour Members opposite will support us, as we need their support, in continuing to reduce public expenditure so as to restore the health of the economy.

Mr. Meacher: Given that the main cause of an extension of the money supply is now the soaring amount of bank lending to the private sector, will the Chancellor accept that the supplementary special deposit scheme is now totally inadequate to remedy this? If that is so, why has he maintained it? Or, if he still thinks it is relevant, why has he not blocked such patent evasion measures as the issue of acceptances?

Sir G. Howe: For the reason that I have explained to my hon. Friend, that action to block one variation of that kind is all too likely to lead to the development of some variation beyond it making it more difficult to measure and identify what is taking place. As I said in my statement, I recognise that the supplementary special deposit scheme has many shortcomings about it, but it would be foolish to sweep it away without having further thought about what supplementary system ought to take its place. That is why studies are continuing on a monetary-based control.
The hon. Gentleman would be unwise to conclude that our problems spring mainly or wholly from expanding bank lending to the private sector. He should bear in mind the extent to which public borrowing has, as I said in my statement, been substantially and unpredictably increased to the tune of no less than £1,000 million, as a direct result of irresponsibility by no more than 80 people.

SIR ANTHONY BLUNT

Mr. Skinner: On a point of order, Mr. Speaker. I want to raise a matter on the revelations affecting Sir Anthony Blunt, and a statement that has been provided in the form of a written answer today by the right hon. Lady the Prime Minister.

Sir Anthony Blunt is known to have confessed to having been involved in the Burgess-Maclean-Philby-and-others affair. I want to ask you, Mr. Speaker, whether you consider that this matter of security is so important that it should be the subject of a statement from the Dispatch Box so that it can be properly examined and probed by Members of the House of Commons? Is it not worth noting that it contrasts sharply with the relentless pursuit of the journalists involved in the ABC case, and Mr. Philip Agee?
Does it not warrant a statement now from the Box and also a full debate on the matter in the course of next week?

Mr. Speaker: Order. I know that the hon. Gentleman is interested in the same question. I allowed him to make his full point of order in the knowledge that I am not responsible for national security. That responsibility does not lie with the occupant of this Chair. Therefore, there can be no point of order about that.

Mr. Skinner: On a different aspect of the point of order—[Interruption.]

Mr. Speaker: There can be no point of order about national security, because I am not responsible for it.

Mr. Christopher Price: I want to raise a point of order about the issuing of written answers in this House. It is a convention in the House that when a question is down for written answer the normal time for the issuing of that answer is 3.30 pm. One of the reasons for that is that hon. Members should be able to raise during business questions matters which are the subject of written answers. On this occasion, Mr. Speaker, the answer to a written question formed the subject of a very important issue, which has been reported in all the newspapers today, and on which I wished to address a question to the Leader of the House asking for an urgent debate next week on this issue. This answer was delayed until the end of business questions, which deprived hon. Members of their proper and rightful privilege of questioning the Leader of the House on this issue, when the whole country is wanting to know when we are to debate the double standards about the Official Secrets Act that this Government are attempting to introduce in another place, thereby making matters very much worse.

Mr. Foot: Further to the point of order raised by my hon. Friend, I believe that the House will agree that a matter of significance to the House as a whole arises here. Could not the Leader of the House assist us by saying that a statement will be made tomorrow, so that questions can be put? I would have thought that this was a subject on which it might be at any rate debatable whether it should have been the subject of a statement rather than a written answer. Therefore, will the Leader of the House assist us by saying that a statement will be made tomorrow?

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. St. John-Stevas): As to the point raised by the hon. Member for Lewisham, West (Mr. Price), written answers come at various times of the day. There is no absolutely fixed time. Sometimes they come much later. There was no particular significance in the time chosen for this.
As to the need for a statement, in these matters of security it is advisable, as you have shown, Mr. Speaker, to tread prudently. I should have thought that the written answer by my right hon. Friend the Prime Minister was of such length and detail that we would be wise to consider that before pursuing any other matter.

Mr. Foot: On a point of order, Mr. Speaker. The right hon. Gentleman made an important statement. I hope that what he says means that he is not excluding the possibility that the Prime Minister

will make a statement on the question so that she may have questions put to her on the subject. After all, this has been a matter on which statements were made in the House. I hope that the answer means that he is not excluding the possibility of a further oral statement on the subject.

Mr. Cryer: rose—

Mr. Skinner: rose—

Mr. Speaker: Order. We have dealt with that point.

BILL PRESENTED

TRANSPORT

Mr. Norman Fowler, supported by secretary Sir Keith Joseph, Mr. Secretary Younger, Mr. Secretary Edwards, Mr. Secretary Nott, Mr. John Biffen and Mr. Kenneth Clarke, presented a Bill to amend the law relating to public service vehicles; to make provision for and in connection with the transfer of the undertaking of the National Freight Corporation to a company; to provide for the making of payments by the Minister of Transport in aid of certain railway and other pension schemes; to make amendments about articulated vehicles; to abolish the Freight Integration Council; to repeal certain provisions about special authorisations for the use of large goods vehicles and about charges on independent tramways, trolley vehicles and the like; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 79.]

Orders of the Day — PROTECTION OF TRADING INTERESTS BILL

Order for Second Reading read.

The Secretary of State for Trade (Mr. John Nott): I beg to move, That the Bill be now read a Second time.
I am moving today the Second Reading of a Bill which deals with matters vital to the interests of the United Kingdom as an international trading nation. While I hope that it will command general support, I recognise that the Bill in some respects breaks fresh legal ground. I hope that I shall be able to persuade the House that it is justified. In view of the complicated nature of and the particular background to the Bill, I fear that I shall have to delay the House for rather longer than I would wish. It is, however, important that I set out the full facts underlying this proposed new piece of legislation.
My objective in introducing this Bill is to reassert and reinforce the defences of the United Kingdom against attempts by other countries to enforce their economic and commercial policies unilaterally on us. From our point of view, the most objectionable method by which this is done is by the extra-territorial application of domestic law. In theory this is a general problem, since many countries have policies which, given the occasion and the inclination, they might seek to enforce on persons located, or engaged in activities, beyond the normal bounds of national jurisdiction as recognised in international law.
In effect, however, the practices to which successive United Kingdom Governments have taken exception have arisen in the case of the United States of America. We have not suddenly become belligerent or confrontational in regard to this most powerful and valued friend. The Bill is a response to a situation of a very particular nature which has been developing over several decades and which in the past few years has become much more acute. It also emphasises that, in so far as the application or enforcement of any foreign law requires the active assistance or passive aquiescence of

the United Kingdom the overseas country in question must have regard to the trading interests of the United Kingdom.
The Government recognise that the United Kingdom bears a heavy responsibility in the maintenance of the open international trading system in what is, nevertheless, an increasingly interdependent trading world. We have to maintain the principle of enterprise and competition between undertakings within individual nations and between trading nations themselves. At the same time, the increasing volume of international trade, the swiftness of modern communications, the international nature of many enterprises and increasing specialisation on the part of industrial nations means that, while trading nations are interdependent in a real sense, their economic and commercial policies are bound sometimes to come into conflict. We recognise this, and we believe that the right way to sort out the resulting differences of policy and approach is by intergovernmental discussion and negotiation through the established international organisations by which trade policy is co-ordinated multilaterally, as well as in bilateral contacts and negotiations between Governments.
I have to say that the United States has shown a tendency in certain respects over the past three decades increasingly to try to mould the international economic and trading world in its own image. There are certain well-established and deeply held principles in United States economic thought and law which, no doubt from the best motives, the United States seeks to have observed by its trading partners elsewhere in the world. This attitude is shared by the United States legislature, its courts and its enforcement agencies, all of which have contributed to the situation to which we object. Pre-eminently this arises in the field of anti-trust, or competition, law, and accordingly much of my speech will be devoted to that subject. But, as I shall explain later, there are many other areas in which the United States seeks to impose its own law or concept of good practice on those who do business with it, and even on those who do not do so in any direct sense.
The basic anti-trust law is the Sherman Act, which was passed in 1890. The wording of the Act outlaws restraints of trade in very general terms.
In the first United States Supreme Court case in 1909 involving the extra-territorial reach of the United States anti-trust laws, the court spoke of the general and almost universal rule that the character of an act as lawful or unlawful must be determined wholly by the law of the country where the act was done. It stated that all legislation was prima facie territorial, and that it would be an interference with the authority of another sovereign, and contrary to the comity of nations, for a nation to apply its own laws to acts done outside its jurisdiction. This was a clear expression of the territorial principle of national jurisdiction which we in the United Kingdom still observe.
However, by 1945 the United States courts had changed the situation drastically. In a case involving a Canadian and five European aluminium producers who joined together to allocate the amount of aluminium to be produced, the United States alleged that there had been an effect on the price of aluminium in the United States of America. In giving judgment, the court stated that
any State may impose liabilities, even upon persons not within its allegiance, for conduct outside its borders that has consequences within its borders which the State reprehends".
The court found the agreement between those non-United States companies, which was an action performed entirely outside the United States of America, to be illegal under the Sherman Act and punishable according to the provisions of that law.
Since that time this so-called "effects doctrine" has been applied and extended by the United States courts and regulatory agencies. Furthermore, in applying this doctrine the United States courts have paid comparatively little attention to the interests and policies of foreign Governments where these have been in conflict with those of the United States. Even if they had done so, it would, in my view, be fundamentally unsatisfactory for United States law unilaterally to pass judgment on economic problems which by their very nature are of concern to more than one country. The wide extent and fundamental uncertainty of this claimed reach of United States law through this pernicious extra-territorial effects doctrine has created uncertainty for international industry in this country and elsewhere. The views which I express on this subject are not held just by our Government;

they are held and deeply felt in Canada, Australia, South Africa and other countries of the EEC.
However, we have further objections beyond this to the impact of the antitrust laws on our international trade. Not only are they enforced by criminal sanctions in proceedings initiated by an enforcement agency, but they confer a civil right to triple damages on parties injured by acts unlawful under them. We regard this civil sanction—I refer here to triple damages—as being penal rather than compensatory, and consequently we consider that in international dealings at least these proceedings should be subject to the limitations that we would regard as appropriate to criminal proceedings. In fact, they are subject to no such limitations. The plaintiff is given what appear to us to be unfair advantage. The defendant need not be present in the United States in order for the proceedings to be brought and heard there; whether or not he appears, he is subject to discovery; and failure to appear is deemed to be an admission of guilt. Furthermore, the United States system of class actions and the so-called "contingency fee" method of payment to lawyers combine to prejudice the defendants. Contingency fees encourage lawyers to invest their time and expertise in stimulating litigation by identifying potentially successful plaintiffs and prosecuting their cases for all they are worth.
As a matter of public policy in this country, we have always opposed the contingency fee system on the ground that it increases the partiality of the lawyer representing one party. Further, the consequences of such a system are exacerbated by the procedure of class actions. While the class action itself may be a sensible way of determining the rights of a large number of people in the same position, in practice the larger the class of plaintiffs involved, the greater the source of potential profit to the litigation lawyers.
The penalties that may be exacted in such civil anti-trust proceedings are often wholly disproportionate, particularly since the Government may either have brought criminal proceedings already or, for good reasons, rejected that option.
Indeed, the nature of the penal element in civil damages seems to come perilously


near to being in conflict with the Bill of Rights 1689, which said:
That excessive bail ought not to be required nor excessive fines imposed nor cruel and unusual punishments inflicted.
The eighth amendment to the constitution of the United States, passed in the United States Bill of Rights in 1791, includes expressions from our Bill of Rights. It is therefore widely felt that penal and exorbitant damages—triple damages—are possibly equivalent to "excessive fines" as set down in the Bill of Rights.
The second area in which difficulties arise is the powers possessed by many agencies in their execution of the duties laid on them by the United States Congress. Those powers may lead them on occasion to pursue inquiries or launch proceedings against persons, who, according to our view of international law, are outside the jurisdiction of the United States. Successive Governments have been obliged to intervene in such cases on behalf of our traders. These agencies include the Federal Trade Commission, the Securities and Exchange Commission, the Federal Maritime Commission, the Commodity Futures Trading Commission, and others.
The third objectionable practice on the part of the United States is that from time to time it treats foreign subsidiaries of United States companies, or even companies in which United States citizens hold a number of shares, though not enough to make the companies subsidiaries of United States companies, as being for that reason subject to United States jurisdiction. Such companies may be required to behave in certain ways, including providing information for the purposes of United States domestic regulatory agencies.
That means that in furtherance of a United States Government policy, which may or may not be shared by other countries, companies domiciled and operating outside the United States, under the laws of other countries, are required to take actions which can and do have a direct bearing on their commercial wellbeing and on the jobs of, for example, British citizens who work for them in this country. No British Government can accept that British jobs should be harmfully affected by such legislative actions

of the United States Congress or enforcement actions of United States Government agencies.
This is not my normal sort of speech. I hope that hon. Members will give me the benefit of any doubt. We are engaged in a delicate and complicated legal matter. I have written down my words and am choosing them with great care.

Mr. John Prescott: I have sympathy with the Secretary of State's argument that it is a legal matter, but I hope that he will address himself to the arguments of economics and competition.

Mr. Nott: I have explained at length why we object to certain of the practices of the United States in the legal and economic field. I hope that I have made it clear that while to the casual observer it may not appear a matter of special importance that such and such a company is involved in a United States anti-trust inquiry, or is subject to investigation by some other agency of the United States Government, real issues of national interest are involved for us. The issues are not theoretical or merely of interest to lawyers. I will give an example that will interest the hon. Member for Kingston upon Hull, East (Mr. Prescott).
Last June, a United States grand jury handed down criminal indictments against several shipping companies and individuals, including two consortia in which there is a substantial British element—Cunard and Bibby Lines—and two British nationals. The indictments alleged that the consortia had violated United States anti-trust legislation by establishing rates without the approval of the relevant United States regulatory authority, the Federal Maritime Commission. The Government reacted strongly against the handing down of these indictments, as did the previous Administration to the institution of the grand jury investigation itself. The policy of the British Government, along with that of all European Governments, has been to avoid detailed regulatory intervention in the commercial aspects of international shipping. We believe that to be the best way of achieving efficient and effective shipping services and protecting the interest of the consumer.
There is the important point, too, that shipping is an international business. Once one starts regulating other than on an


agreed basis, many jurisdictional problems can arise. Our own restrictive practices legislation reflects the policy that I have described.
In reference to this case, a senior official of the United States Department of Justice recently recalled that fines of over $6 million were imposed—the largest in the history of the Sherman Act. That was against our shipping companies. He continued that this upward trend was continuing and that, indeed, the antitrust division might well be on its way to becoming a "profit centre" for the Department of Justice. I think that we can draw our own conclusions from that attitude.

Mr. Eric Ogden: Presumably, the Secretary of State is not saying that he is against profit.

Mr. Nott: I do not think that the High Court of Justice and the Court of Appeal would consider themselves as profit centres. Generally I like a profit motive to be available, at least to business men, but that is a different matter from seeking to make the Department of Justice a profit centre.
The shipping companies decided to plead "no contest", because of the great cost of litigation in cash and managerial time, and so the case against them was not proved in court. Nevertheless, the highest possible fines were still imposed. Those companies now also face the threat of further proceedings and more sizeable fines by the Federal Maritime Commission for effectively the same offences. On top of that, civil triple damage proceedings have been commenced against them in which the claims may be over $1·5 billion in triple damage suits.
Such claims are no mere bogy. Some United States paper producers have recently paid $500 million in fines and damages as a result of anti-trust proceedings. The consequences for the shipping companies are potentially financially crippling. No Government can stand by and allow a vital industry to be threatened in that way when we contest the very basis of the United States action.
In another triple damage anti-trust case currently going on in the United States of America, where total damages of up to $6 billion are being claimed, yet

another major United Kingdom company—Rio Tinto-Zinc—is at risk. The background to the case is worth explaining.
In 1964, when the United States uranium mining industry was threatened by foreign imports, it was afforded long-term protection by means of an effective United States Government ban on the import of uranium for use in United States reactors. At a stroke that denied to the non-United States producers about three-quarters of the world market for uranium. During the late 1960s and early 1970s, Westinghouse, which is the United States of America's biggest power engineering company, concluded a number of contracts relating to the construction of nuclear power stations in which it agreed to supply future quantities of uranium but failed to take the precaution of buying forward to cover its commitments.
In the meantime, the uranium producers outside the United States of America had, with the positive encouragement of Governments involved, taken some action to protect their markets outside the United States of America in the light of the United States ban and the generally depressed market conditions, which it aggravated.
Following a large and unexpected increase in the price of uranium after 1973, Westinghouse found itself in serious difficulties. In September 1975, it gave notice that its uranium supply contracts had become "commercially impracticable". It blamed the large oil price rise in 1973 and claimed that the cause was the
actions of foreign uranium producing countries and companies that have significantly curtailed international uranium supplies".
This led to Westinghouse being sued by the public power utilities. The total amount of compensation claimed was about $2 billion. Westinghouse took this figure as the basis for a triple damage anti-trust claim against the uranium producers. I note that Westinghouse had not included amongst the defendants the French producers that were involved. I cannot regard that as an accident, in view of Westinghouse's interests in France.
The case is still going on, but nine of the foreign defendants, including RTZ, have not accepted that the United States court has jurisdiction and have not appeared. Westinghouse is trying to recover damages from those foreign companies even before a trial on the merits


has been heard. That is not scheduled to take place until 1981.
The actions of the non-United States uranium producers reflected policies of the Governments of the uranium-producing countries involved and were a direct result of the earlier United States protectionist embargo. Even the United States Government, despite their general claims to extra-territorial jurisdiction, decided to take only the most modest proceedings against one United States company in this case.
Why, then, should a United States company be able to drag foreign companies, including one of our leading companies, before a United States court in order to obtain massive damages for activities by non-United States companies outside the United States at a time when they were even denied access to the United States market?
I could give further examples of how various regulatory agencies in the United States are attempting to extend their reach to companies located outside the United States of America. The SEC and the Commodity Futures Trading Commission are both making moves to extend the reach of their jurisdiction beyond the United States, and Congress has recently passed legislation dealing with rebating in the shipping industry, which is legal in Europe but outlawed by the Federal Maritime Commission. Penalties could involve port closure for particular shipping lines.
I must emphasise that we do not dispute the right of the United States or any other nation to pass and enforce what economic laws it likes to govern business operating fully in its own country. Our objection arises only at the point when a country attempts to achieve the maximum beneficial regulation of its own economic environment by ensuring that all those having any contact with it abide by its laws and legal principles.
In other words, there is an attempt to export economic policy and law to persons domiciled in countries that may have different legal systems and priorities, without recognising that those countries have the right to lay down the standards to be observed by those trading within their jurisdiction.

Mr. Clinton Davis: How does the right hon. Gentleman view

the American anti-Arab boycott legislation? Does he feel that it is an example of the extra-territorial jurisdiction of which he complains? It is clearly a matter with wide international ramifications.

Mr. Nott: The answer to the question is "Yes". I consider that the United States anti-boycott legislation comes within the area that I am describing. I do not think that I need to go further.

Mr. Peter Emery: Can my right hon. Friend assure the House, in view of the peculiar nature of the legislation, which is obvious from my right hon. Friend's speech, that all diplomatic channels and negotiations have been carried through between the British and American Governments in order to try to overcome the problems and to avoid the necessity of the Bill being produced?
I am sure that the answer must be "Yes", but it is important that that should be spelt out so that those coming to grips with the legislation may understand that successive British Governments have done everything possible to rectify the situation by normal negotiations.

Mr. Nott: The right hon. Member for Lanarkshire, North (Mr. Smith) and the hon. Member for Hackney, Central (Mr. Davis) will confirm that we have several decades of diplomatic representation on this subject behind us, as have most other Western countries. It is not just us who are offended by the extra-territorial jurisdiction claimed by the United States under the effects doctrine which came rather late into the Sherman Act proceedings.
Since the Government came to power, I have made diplomatic representations on the shipping case and the Government have been involved in the uranium case. The only aspect of the Bill that we have not debated in full with the United States authorities is clause 6, which involves the recovery of triple damage suits in this country.
Since we published the Bill, the United States ambassador has seen me and made certain representations and I have given him a response. Apart from that, the general underlying seriousness of the British Government's view towards triple damage suits and the extra-territorial reach of the United States has been a matter of diplomatic representations by


successive Administrations over the years, but it has achieved nothing to speak of.
Voices are continually being raised in the United States against trends in that country. Last month Mr. George Ball, a former Under-Secretary of State and former permanent representative at the United Nations, who is well known to the House, said that during his years in the State Department he had encountered no set of problems that evoked greater frustration and exasperation from foreign Governments than the United States' occasionally excessive bureaucratic zeal in trying to extend its laws and regulations extra-territorially.
Mr. Ball pointed out that the United States would resent it deeply if other nations tried to impose their peculiar policies and prejudices on the USA. He concluded that, if the United States continued to try to extend its jurisdiction beyond its borders, the whole system of international comity could break down.
There are many other statements by United States lawyers and citizens before Senate committees that I could quote, but I have already gone on for too long and time forbids it.
Perhaps surprisingly, our proposals have received a remarkably good reception in the United States press. The Washington Post recently carried an editorial entitled "Anti-trust: The New Imperialism". It concluded:
the Sherman Anti-trust Act is not a suitable instrument for the regulation of world trade. Maintaining international competition is the proper business of diplomats and negotiation, not federal judges and litigation.
There have been several useful articles on the subject in the United States, where there is a general body of support for non-United States feeling about the effects doctrine.
The law does not operate in a vacuum. It is not something only for debates on jurisprudence between academic lawyers. The law is there to defend the interests of citizens and it is essential that we look on the Bill as an attempt to deal with a problem which we have failed to deal with at diplomatic level over many years. It is a genuine attempt to protect British economic interests, operating not necessarily even in the United States.

Mr. Ivan Lawrence: My right hon. Friend has made clear that an appalling situation exists. It is appalling that we should be driven by our close friends the Americans to have to take this sort of defensive action.
The situation has existed for a long time. Why has no action been taken in previous decades? Presumably a considerable number of British companies have suffered from the effects of United States legislation.

Mr. Nott: I cannot answer for my predecessors. I admit that our approach in clause 6 is rather novel and will, no doubt, cause a fair amount of fluttering in the legal dovecotes. I hope that when the Bill goes to another place senior and distinguished members of the legal profession will state their views.
I do not know why my predecessors have felt unable to take the action that I am proposing. I believe that the time has come to do so. There are two particularly prominent examples in the courts in the United States and it is appropriate to move forward in the way that I propose.
We already have powers under a 1964 Act to deal with certain aspects of the extra-territorial reach of United States laws, but that Act was passed in response to a specific and offensive instance of extra-territorial claim to jurisdiction by the United States in shipping matters. It proved useful in a number of cases in which we have been able to ensure that commercial documents in the United Kingdom have not been available in response to United States requirements, but we have found that, in the light of recent developments in the United States, the 1964 Act is no longer adequate to protect our interests.
I should tell the House that we have received representations from the United States Government about a number of aspects of the Bill, particularly the extension of the powers to prevent the production of documents from outside the United States, the total non-enforcement of multiple damage judgments, and the rights of recovery conferred by clause 6. We are examining with care the points which they have raised with us on the publication of the Bill.
I stress again that we are, as ever, ready and willing to try to resolve problems


underlying our commercial relations with the United States, or for that matter any other country, by discussion and negotiation. We think this is the right way, particularly as both we and the United States share a common commitment to a generally liberal attitude to world trade. For example, although the anti-trust action against British shipping interests has had an influence on certain provisions of the Bill, I have made it clear when expressing my strong objections to the action of the United States authorities in that case that we stood willing to continue our discussions with them with the aim of reaching agreement between us on shipping matters. Discussions have taken place in Washington in the last fortnight and we hope that the United States will respond to this approach. But the House will understand that any future changes in United States practice cannot affect the cases of United Kingdom companies already before the courts, and there is no alternative but to go forward with this Bill at the same time.
The Bill, with its explanatory memorandum, is before the House and I felt that it was more important to explain to the House the background to the Government's decision to bring this measure forward, rather than to give a clause by clause exposition of the Bill. I can do so, but I think that we can leave that to Committee. The memorandum sets it out relatively clearly.
If the House does not insist that I go through the Bill clause by clause, I will make some general remarks on this Government's attitude to competition policy and its relationship to United States antitrust policy. To some people, it may seem odd for a Government committed to the strengthening of British competition policy to propose a measure to impede the enforcement by our courts of the competition policies of other countries. There is no incompatibility between the Competition Bill and this Bill. Competition law varies from State to State in accordance with their economic and other priorities, and there is no international consensus on what competition policy should be.
Lord Wilberforce said, when giving judgment in the House of Lords:
It is axiomatic that in anti-trust matters the policy of one State may be to defend what it is the policy of another State to attack".

That was a quite useful obiter diction from Lord Wilberforce. Without needing here to go quite that far—and we are not going quite that far—I would say that competition law is a branch of public law on which, by contrast with most fields of private civil law, there can be no presumption that one State will enforce the policy and laws of another State—just as States generally decline to assist in the enforcement of the taxation law of other States. On competition judgments, the existing situation, under ancient principles of our law, is that our courts will not enforce criminal penalties in the laws of other States, whether on competition or on anything else. Clause 5 of this Bill will make clear that triple damage judgments will similarly not be enforced, and the discretionary power of subsection (4) and (5) would be available to specify other foreign competition policy judgments as non-enforceable, if the other powers proved insufficient to prevent the sort of mischiefs of which I have spoken. These are points of important legal principle and do not affect the political commitment, which I believe we share with the United States, of operating and enforcing an effective competition policy in each of our two countries.
I say to the House that the Bill is not anti-American, or indeed anti-anybody. I hope that I have made that clear. It is designed to protect and not to provoke. But it deals with matters where the law and legal practice of the United States have become a mater of international concern—not only to us but to other nations, many of which have adopted their own means of looking after themselves. It is a legitimate exercise of our own sovereignty.
The Government believe that negotiation and discussion between sovereign Governments are always the best way to settle international trading problems and disputes, and therefore I hope that I shall have little cause to use the discretionary powers conferred by the Bill. But I wish to leave no doubt that I will be prepared to use it in the defence of the legitimate economic and trading interests of our country. I do not rule out further legal provisions unless we can solve these longstanding problems in a more satisfactory way than we have been able to do up to now.
I commend this Bill to the House.

Mr. John Smith: The last time the Secretary of State introduced a Bill, I complained about the shortness of his speech. I am not in a position to complain about the length of time that he has taken this afternoon to explain the background to the Bill. The House will have found his explanation helpful.
Although the Bill is couched in wide and general terms, it is designed principally to provide protection for United Kingdom companies and citizens against legal actions initiated against them in the United States, arising from the anti-trust legislation of that country, pursued by the United States in reliance on its claims that its laws can be applied extra-territorially.
This is not a new problem. The constituent elements have been with us for many years. The United States assert jurisdiction, especially in the anti-trust sector, on a wider basis than do most other countries. The effects doctrine, the enterprise entity doctrine, the notion of treble damages and the judicial rather than governmental initiative that sets off legal proceedings all combine to create serious problems for other countries such as ourselves which trade internationally with the United States but do not seek to impose their laws on a similar extra-territorial basis.
As the Secretary of State explained in his introduction, the problem has become more acute in recent months as a result of certain pending legal actions which have, to put it mildly, somewhat raised the temperature. When the indictments were served in the shipping cases, the previous Labour Government made a forceful complaint to the United States Administration about the service of indictments on British citizens and warned them of our fears that a serious dispute would emerge between us if these actions were pursued. Regrettably, that dispute now exists in a serious form.
The Government are basically right to propose the measures in clauses 1 to 4 of the Bill, which derive in spirit from the Shipping Contracts and Commercial Documents Act 1964. The effect of the provisions is to widen the powers of the Secretary of State to cover powers other than shipping—which was covered by the previous Act—and to make his powers

more effective. We make no complaint in principle about that, and we shall not be asking the House to divide against the Bill.
Clause 5 restricts the enforcement of overseas judgments. It may do no more than declare what the existing law is and what the courts might apply, and puts it into statute form. That is a matter that could be examined more carefully in Committee. It does not raise a tremendously important point of principle.
Clause 6 is one aspect of the Bill that requires a more critical scrutiny by the House. I appreciate the reasons that lie behind it. It may be that the Government will be able to justify its purpose and provisions when we examine them in detail in Committee. From remarks made by the Secretary of State, it is obvious that it has already caused some difficulty, in explanation at least, to the United States.
At this stage I confine myself to drawing the attention of the House to certain aspects of clause 6 that merit quite serious and full consideration before the Bill reaches the statute book. In shorthand form, the clause gives United Kingdom companies and citizens the right to hit back at those who pursue them and have obtained treble damages awards against them in the courts of the United States. It allows them to sue for the recovery of the excess damages contained in the award over and above the compensatory element. They can do so in the United Kingdom courts.
As the Secretary of State conceded, this is a novel proposition. It is not one that has yet been advanced either by this country or any other of the countries which share this problem in their relationship with the United States or other countries. Of course, novelty should not be used as a ground for objection to any proposal, but some other aspects might justify fuller consideration.
The House will note that the other forms of protection that are given to United Kingdom companies and citizens are all under the control of the Secretary of State. That is true of clauses 1 to 4. In those circumstances the Secretary of State must give a direction. But there is no control by the Secretary of State over clause 6. It merely gives a right to


a company to initiate these proceedings under the circumstances described in the clause.

Mr. Nott: That is absolutely correct, but the triple damage suits are not under the control of the United States Administration. That is the point at issue. United States civil suitors are using what we would regard as quasi-criminal measures. I believe that we have treated the matter fairly competently both ways. However, the right hon. Gentleman's point is a fair one.

Mr. Smith: I understand that the suits are not under the control of the United States Administration. Indeed, that is part of the problem. For example, one may speak to the State Department and discover that the problem has emanated from the Justice Department. That has been a perennial problem experienced by successive British Governments.
The Secretary of State's point is true of the protections given in clauses 1 to 4. They are protections that can be used against actions initiated by anyone other than the United States Administration. I am drawing the attention of the House to the difference between clause 6 and the other clauses. It may be that there will be circumstances in which the use of the power to sue by a United Kingdom company or citizen will not be in the national interest of this country, and as the Bill is presently drafted the Secretary of State will be able to do nothing about that.
I think that there was also some danger that the use of the power to sue by a United Kingdom company hitting back against the treble damages award might itself trigger off another counter-action in the United States against the British company that had assets in the United States. Therefore, we again face a situation in which legal action followed legal action in the respective courts of the respective countries. I would welcome at a later stage, not necessarily today, the Government's views on such a possibility, because this is a factor that the House should take into account before giving approval to the legislation.
No one should delude himself into thinking that by making the Bill an Act of Parliament we shall solve any of the serious problems that now exist between the United Kingdom and the United States. Those problems will certainly not

be solved by a series of exhausting, embittering, expensive and lengthy actions and counter-actions in the courts of our respective countries. Perhaps the clause is designed to have a certain deterrent effect. If so, so far so good. If it does not operate in that manner, its use might not be very wise in many circumstances.
We must bear in mind that while the Bill may give a few more weapons to one side to assist the solution of these problems, we shall not solve them unless we tackle them by the traditional methods of international dialogue and discussion. Indeed, that is the only civilised and effective way of solving these problems.
I know that considerable efforts have been made. For example, the consultative shipping group, representing mainly OECD shipping countries, has sought to have discussions with the United States Administration and Congress about these problems. On some occasions, progress has been frustratingly slow. Nevertheless, the Government should persist in these discussions and negotiations in the hope that some arrangements will be arrived at that respect both the jurisdictions and commercial interests of our respective countries.
One idea in regard to shipping that might be worth pursuing is that of an independent scrutiny of shipping conferences. That idea might meet some of the concern of the United States, as well as some of our commercial requirements. I merely put it forward as the sort of idea that should be discussed between the United Kingdom Government and the United States Government.
We do not propose to take objection to the main points of the Bill, particularly clauses 1 to 4, but I believe that serious problems may arise from clause 6, which is novel and far-reaching in its effect, not just in legal terms but in regard to some of the commercial consequences that might flow if it were used too liberally and unwisely.
I believe that we should approve the Bill today, but we shall want to examine clause 6 very carefully and precisely in Committee. I hope that the Government will be prepared to listen to our arguments and give detailed examples of the way in which that clause may be applied. Perhaps they will accept any constructive amendments that emerge during our discussion.

Mr. Graham Page: The Bill is overdue. I do not blame my right hon. Friend the Secretary of State, because he has acted expeditiously in the comparatively short time that he has been in office. I also realise that there must be diplomatic negotiations in regard to these matters and that one cannot dash into legislation in order to protect the interests of our international trade without those negotiations.
Nevertheless, during the latter half of the 1970s the mischief that the Bill seeks to attack has been evident and growing, with the result that it has culminated in the two recent cases. I understand that the American company Westinghouse has now 29 actions against other companies, including an action for about $2 billion against RTZ and its subsidiaries for treble damages for acts committed outside America that were not illegal where they were committed. Another result is that 34 companies are suing Atlantic Container-line Services Limited—which, incidentally, is an undertaking that operates from the Royal Seaforth docks in my constituency—as well as Dart Containerline Limited and others within the consortium for treble damages even though those companies have done nothing illegal outside America.
In the shipping case, these companies and two Britons, Mr. Philip Bates of Atlantic and Mr. David Hall of Dart, have already been fined $1 million in respect of the companies and $50,000 each in respect of the individuals. In looking at those cases one can only think that they are an attack upon rivals to the Americans in international trade. It is an attack that is using weapons which to us are not the sort of weapons that should be used in international trade.
This all comes about because of the way in which the American courts have developed the American anti-trust law. I do not know whether I should pronounce "anti-trust" as the Americans do; I find that the Americans do not understand what we are talking about when we use the English pronunciation. Nevertheless, I shall use the English pronunciation in this House. At any rate, this law goes back to 1890, although the trouble has been caused by recent developments in the interpretation of that law by the American courts, based on

the two doctrines that my right hon. Friend mentioned. There is the "effects" doctrine, by which the American courts can claim jurisdiction over activities, wheresoever or by whomsoever they have been done, which have effects within the United States or which affect the foreign commerce of the United States. Of course, that is a very great extension of what one would normally understand to be reasonable competition law.
The other doctrine is the "enterprise entity" doctrine, under which American courts claim jurisdiction over foreign subsidiaries and affiliates of American companies without regard to the separate legal entity that those bodies have within the countries in which they have been incorporated. Now that we have a Bill that endeavours to tackle the results of those doctrines as they affect our own nationals, we must make it effective. It must be effective not only against events such as those that have arisen in relation to shipping and uranium but to prevent those cases breeding a family of what I would call international trade-destructive monsters.
The details of the Bill will be discussed in Committee, but it is necessary to look at clause 1 to see whether the Bill will be effective in the kinds of cases which have already happened and which might happen in the future in the United States courts unless some deterrent is created.
Under clause 1, the Secretary of State can take action if it appears to him
that measures have been or are proposed to, be taken by or under the law of any overseas country".
He can do so if such countries seek to control or regulate international trade, or if the measures taken by a country
apply to things done … outside the territorial jurisdiction of that country by persons carrying on business in the United Kingdom, … or threaten to damage the trading interests of the United Kingdom.
There is much for the Secretary of State to prove if he is called upon to show that an order under clause 1(1) is a valid order. United States law, which declares it illegal for a British shipping consortium to fix freight charges on North Atlantic freight routes, obviously complies with those criteria, but they are severe criteria. However, I assume that that law can be designated by the Secretary of State as "a measure" under clause 1.


The Secretary of State must then make another order by which he can require the person in the United Kingdom who is threatened by provisions under overseas law to tell him about the restrictions or requirements that have been placed on his trade. Then the Secretary of State can direct the threatened person not to comply with that foreign law, so far as it
infringes the jurisdiction of the United Kingdom or is otherwise prejudicial to the sovereignty of the United Kingdom"—
or to the security of the United Kingdom or to United Kingdom relations with any other country. That provision is laid down in clause 2(2).
We have dressed up these proceedings with elaboration. If we are to condemn this practice, let us condemn it robustly and not make difficulties for the Secretary of State when he wishes to create deterrents to attacks on our international trade.
How might these measures deter the United States courts from the trend of their recent judgments? If they fine a threatened United Kingdom business, that fine stands. We can do nothing about it. We cannot recover the fine. That fine must stand and can be seized out of whatever goods the company may have in America. I presume it is not registrable as a judgment here, but I am not sure. If a British company is fined by the American courts and the fine is not paid, can we be required by the American Government to collect the fine here? I hope not.

Mr. Charles Fletcher-Cooke: The answer to that must be "No". That is a penalty, and no country will enforce the penalties of another.

Mr. Page: I am sure that my hon. and learned Friend is right, but I should like it on record that the Bill does not alter the general law. There is, of course, the deterrent of the recovery of part of the triple damages, and that seems to be the only form of attack in, for example, the uranium case, where I understand that the prosecution has been dropped, and the civil cases are going on.
Although the shipping and uranium cases are based on measures that the Secretary of State could designate under the provisions of clause 1, the question is whether this process will be effective in

other cases which need to be attacked by the Bill.
My right hon. Friend the Secretary of State referred to companies in which there are 25 per cent. or more American shareholders. It is claimed by the United States courts that those companies are subject to American law, wherever they may carry on business. It is not necessary, according to United States law, for them to be carrying on business in America in order to be subject to American law. I find it difficult to see how the Secretary of State will apply the measures in clause 1 to that type of company. Yet it will create great difficulties in this country if a company is to be subject to both American and United Kingdom law and if those two laws are in conflict.
There are also attempts by the United States to control the activities of the United Kingdom subsidiaries of United States companies. One such activity has already been mentioned—that affected by the Arab boycott. There is an endeavour to regulate United Kingdom subsidiaries in connection with that boycott. That results in damage to our trade in the Middle East. I also find it difficult to see how the provisions of the Bill can help in such a case. I hope that I am being too pessimistic. I hope that we shall be able to deal in some way with that damage to our Middle East trade.

Mr. Clinton Davis: Why should not the United States Government take that view about the boycott, and seek to impose their law on companies, whatever their source, which seek to trade within their jurisdiction?

Mr. Page: Surely that is not a weapon of international trade which we would be prepared to use against a trade rival, even for political purposes. I object to the use of trade measures to enforce the political views of one country upon the trade of another.

Mr. Davis: This is a major and fundamental factor. The whole concept of the Arab boycott of Israel and of companies that seek to conduct business with Israel is itself a flagrant denial of the very essence of what the right hon. Gentleman is now seeking to assert. Many people think that it is right to take such defensive measures. I see nothing wrong in doing so.

Mr. Page: I note the hon. Gentleman's view of the merits of that case and of that dispute. The precedent is one that might not be used particularly in political issues such as that but might be used in any trade issue against an international trade rival. We ought to be prepared to exercise such deterrents as the Bill may give against that sort of imposition on our companies trading throughout the world.
There are other instances of the American courts and the American Administration endeavouring to regulate undertakings outside their own jurisdiction in order to further their own trade. There is one practice in particular that I hope will come within the Bill. If a United Kingdom company has a branch office in a certain State in America—for example, California or Alaska—it may be taxed not only on the business that it does within that State but may be called upon to supply to that State the accounts of its parent company throughout the world, and even of the subsidiaries of that parent company which may be carrying on different trades in other parts of the world. That branch office, say, in California, is then taxed on a slice of the worldwide cake, and the size of the slice is decided by some tax formula of the State of California.
This has resulted in one case, of which I have been informed, where an undertaking, carrying on a branch business in such a State in America, has been liable to pay 75 per cent. of its profits in tax by reason of the double taxation which results. That unitary taxation on a worldwide reporting basis, as it is called, is obviously detrimental to our trade. I shall be very disappointed if this pernicious form of taxation cannot be tackled under the Bill.

Mr. Nott: My right hon. Friend has touched on a very valid point. The problem is that the remedies for dealing with what he dislikes can in the last resort only lie, as so often, in our exercising extra-territorial jurisdiction against the United States. I share all my right hon. Friend's objections to some of the practices that he mentions, but we must not go so far as to take the very measures about which we are effectively complaining to others. This is the dilemma, and it causes us some problems. I am looking forward to my right hon. Friend's joining

us on the Committee, because in principle I do not have any objection to strengthening the Bill.

Mr. Page: I do not follow my right hon. Friend when he says that we might be taking similar action of an extra-territorial nature. I should have thought that under the Bill, even as it stands, the Secretary of State could say to the head office of a company in the United Kingdom "You shall not produce the accounts of your company worldwide." The State of California could see the earnings of the branch office within that State, but by order here we could reasonably say that the whole of the company's accounts must not be produced. That would at least be some deterrent to taxing the branch upon a slice of the worldwide earnings of the company. But this is rather encroaching on the Committee stage of the Bill, and one would have to consider exactly what the Secretary of State might insist that some company in this country shall or shall not do.
The Government have obviously decided, by the Bill, to take a very important step in protecting the international trade of our undertakings in this country. It is no use nibbling at the problem now. If we have caused any offence to the Americans, we have already caused it by producing the Bill. I do not think that we shall retrieve the position—I do not want to retrieve it—by toning down the Bill or wrapping it round with so much procedure that the Secretary of State cannot do anything effective. The Bill must bite on all the international trade barriers which are akin to the sorts of cases that my right hon. Friend the Secretary of State set out in his speech. I hope that we shall be able to look at the Bill carefully in Committee and ensure that it is indeed an effective and a robust Bill.

Mr. John Prescott: The Bill, as has been explained by previous speakers—and particularly by the Secretary of State—is a countervailing measure. It is to provide protection, as we understand it, so that other countries' legal judgments will not be binding here on United Kingdom trading interests. I have some sympathy with the general point made in the Bill but I have some very severe disagreements


particularly in regard to the justification for the Bill.
I confess to not having noticed or understood the full contents of the Bill until yesterday. The Bill, by its title, deals with a familiar subject. I am specially concerned with shipping matters. I declare an interest, having been a seafarer for 10 years. I have no financial interest in the contents of the Bill, but I am particularly interested in trade between our country and other countries, because this affects shipping and seafarers.
I also have an interest in the development of world trade generally in a world that is increasingly one of haves and have-nots, and with Britain being one of the haves, one of the rich countries, it would appear that the Bill represents and reflects a dispute between two of the richer nations of the world, the United States and the United Kingdom, about what they both consider to be their legitimate interests. In a world in which many areas are starved of their share of industrial development, it is a little obscene to see the richer countries fighting over their share of the trading interests which they have maintained for so long. To that extent, therefore, it is a Bill that I approach with a certain amount of sorrow.
The overall principle governing trade relations, as the Secretary of State has said, should be that agreements concerning extra-territorial commercial activity are the result of intergovernmental action and international action. I fully endorse that principle, and I imagine that everyone in this House would do so. Indeed, there are considerable precedents which have developed over the years, particularly in the area of shipping. We have seen the call for international law and regulation to control many matters. This especially applies to the law of the sea, in which I have had an active interest. It is a very important area for Britain and for many countries, involving the exploitation of mineral wealth beneath the sea as well as the conduct of trade between the nations.
I have particular interest in the development of the liner code. We have attempted in the international arena to find a code that would be satisfactory to the new nations wishing to develop their part in world trade and to develop their

industrial potential to the full. To that extent I am very much a code man and very much in favour of the development of the code. I am sorry that the British shipping interests were so slow in recognising the importance of accepting that principle and had to be dragged along for a considerable period in that respect.
The shipping industry often does not recognise what is in its own long-term interests. It is very dangerous—there are many examples of this—to identify British shipping interests with the national interest. That is all too often the case. I do not necessarily mean that that is the exclusive role of the present Government. It has been a problem for a number of previous Governments, primarily because of the kind of advice received in this clearly complicated area, and one where politicians are bound to need to rely on a considerable amount of advice.
I have one judgment to make about the advice given to Governments by Civil Service Departments. There is a certain amount of bipartisan agreement between the two major parties here. I have disagreed even with my own party over several pieces of legislation. I disagreed with the 1964 Shipping Contracts and Commercial Documents Act, even though I was not there at the time. However, it is relevant to this debate because that was the first piece of countervailing legislation which sought to protect British shipowners against attacks, as they saw them, from the American Administration who disagreed with the control and regulating aspects of the conference shipping position on trade between Europe and America.
However, I have noted the identity of interests in this area and have not prevailed in my arguments for the acceptance of different views. I have concluded that all too often—having watched a number of my close colleagues attempt to argue against the advice given, not always successful—the advice given by the Civil Service Department shows a strong preference for, or identity with, British shipping interests.
I notice, when I attend shipping functions, how many ex-civil servants are present. They seem to be in attendance either when we are lobbied by the industry or on the social occasions when we meet to discuss the various business interests of the shipping industry. I hope that the


Secretary of State will give fair consideration to the number of civil servants who leave the Departments of Trade and Industry and go into the shipping industry. I believe that that is an alarming tendency and I hope that the Secretary of State will seriously consider future activities in this area, because the Department appears to be becoming a nursery for future shipping industry personnel.
I cannot help but feel that in the period during which this has developed, almost decades—

Mr. Nott: A number of centuries.

Mr. Prescott: All right, a number of centuries. That may well strengthen the case. Therefore, as a humble seaman perhaps I should say that there seems to have been a close identity between the Civil Service advice and the opinions held by the shipping industry itself. There is a connection between those two points.
My contribution is about the politics of the Bill rather than the law. I well understand the difficulties of the Secretary of State who has to deal with a Bill that has considerable legal ramifications. Nevertheless, I am more concerned with the politics, the reasons for the Bill, its effect on the politics between this country and America and the consequences for development of trade between our two countries.
Understandably, the Bill is retaliatory, but it contains a fair share of hypocrisy. The essence of disagreement, apparently, between ourselves and the United States of America is on the definition of what may be considered competition. I take the point that jurisdiction between the laws of one country and America is the point at issue in the Bill. Nevertheless, it is the definition of competition that has caused the disagreement between America and ourselves. I shall explain what I mean by that.
I was interested in the remarks made by the Secretary of State when he said that there can exist a difference between two parties who may agree to the same definition of competition. It is an interesting argument, and one that I would have thought was written into the United States constitution, which, to a great extent, creates the difficulty here. But I note also that as we are a member of the Community there is a treaty that expressed certain obligations—one might

call them constitutional—that are of a binding nature and that show a laissez-faire attitude towards competition.
To take the point further, I understand that for some time now the Commission has been concerned about the activities of the conference system, in the sense that it regulates trade. I understand that the Commission has prepared proposals in line with the obligations in the Treaty which are not far removed from the argument put forward by the Department of Justice in the United States for upholding the constitution wedded to a laissez-faire philosophy and a legal interpretation of what competition should mean.
It will be interesting to watch the development of something similar in Europe, particularly in regard to the shipping body organised in a conference system which the Secretary of State used as an example of why we have the Bill today, which is to protect shipowners in their activities. That is basically what the Bill will do. Therefore, it is a definition of competition, written into constitutions, that makes it difficult in the legal sense.
I do not think that the Secretary of State's own remarks about competition leave me in any doubt—certainly during Second Reading of the Competition Bill—where he stands. He said:
At the heart of the Bill lies the fact that the consumer cannot be free to choose unless producers are obliged to compete and because economic freedom rests on competition.
He also made it clear that
In overseas trade … competition and open markets remain the greatest stimulus to trade aboard ".—[Official Report, 23 October 1979; Vol. 972, c. 221–38.]
That is a quite clear and unequivocal statement about what the Secretary of State believes is competition.
I do not believe in competition to that extent. I am not an advocate of the competition system. I believe in a political philosophy that does not have that purpose and objective. My philosophy is different to that of the Secretary of State. Nevertheless, his view coincides with the view given by the shipowners who believe in competition.
One could legitimately ask why the conference system exists. I believe in regulated trade and I find that logically I must accept some kind of conference arrangement to achieve that. I cannot


simply say "Leave it to competition and that will settle it". But if we are prepared to allow regulation of trade, the difference between myself and the Secretary of State—unless he can assure me later that he shares my view—is that if companies come together to regulate trade, one can interfere with the criteria that determine the freight rates, if they are guaranteed and protected in the use of the power to regulate trade. I have always felt that we should ask the members of the conference system on what terms they do it and look for the justifications why they do it.
As I understand it, that information has not been made available to Governments so that they could make a judgment. One of the reasons may be that members of conference systems of other countries have laws in their countries making it illegal, as we do, to provide such information to their Governments. I hope that whoever replies will address himself to that point.
There seems to be a clear dispute between the parties about the nature of competition. The Secretary of State has made clear what he believes is the position, and I think that I have made clear that I am for the regulation of trade and, therefore, I am not too alarmed at the various means that are adopted to do it.
The Bill is about the imposition of sovereign law extra-territorially. The Secretary of State makes a fair point, in respect of a number of clauses in the Bill, that we cannot accept that the jurisdiction of one country can be imposed extra-territorially. Coming from Hull, I am bound to say that I thought of the Iceland conflict, in which I supported the Iceland point of view. I thought that they were right and that we made a major mistake in that matter, involving an extra-territorial judgment. It is a pity that we did not do the same for our fishermen.
The Secretary of State used Rio-Tinto Zinc as one of the justifications for this legislation. I believe that Rio Tinto-Zincs is different from the shipping case, in the sense that that company was not operating in America. It is a very clear case of saying "Our law will apply to a company—whatever the company—that is not an American company operating outside the jurisdiction of American law."
I oppose the idea that multinationals can get together and regulate trade. I do not seek here to do anything about that, although I believe in statutory controls on multinationals. That is more than British Governments of either party have achieved in the negotiations within UNCTAD on the multinationals. Our Governments have always gone for codes rather than statutory requirements in law. To that extent it would be more encouraging if the Government were to tell us that while we have no laws for extraterritorial activity, they will press in international circles for some kind of statutory control of the multinationals. They should at least press for a requirement to provide proper information, in order to assess the transfer costs and the very nature of the economic material needed to establish whether the multinationals' activities are fair or unfair in the interests of the community.
The RTZ case is clearly different from the shipping case. Therefore, I disagree with many aspects of the Bill in the same way as I disagreed with aspects of the Shipping Contracts and Commercial Documents Act 1964. That Act basically protected our companies from giving information to the Federal Maritime Commission about their activities. This was tied up with the complaint by America that these actions of conference systems were restraining trade and controlling freight rates and were illegal under their legislation. We passed legislation in this House giving the companies protection. In doing so we enabled the companies to say to the Federal Maritime Commission that if they gave the Commission that information it would be a criminal act. In a sense that was a strengthening of the British position against the American inquiry into that restrictive practice.
My major disagreement with the Bill—I believe that the Secretary of State feels some concern about this—is on clause 6, which concerns the recovery of awards of multiple damages. This is referred to in one document as "novel". Certainly it is unprecedented. I do not believe that any other legislation of this kind has been passed before. The Secretary of State talked about Britain being no different from other European countries in this dispute with America. We acted as one, and we were all fined as one. In fact, all seven companies were fined $1 million.


As the European companies acted together, both in the conference and in joint agreements with Governments, how is it that the Governments did not discuss whether there should be a common response in legislation? Why is it that Britain goes much further than anyone else in developing this principle? Canada, which was concerned about the legislation on uranium, took certain countervailing measures but did not go as far as we did. I believe that we are the first country to bring in this kind of legislation. That is a major extension of legislation which this House should scrutinise carefully.
I have very serious reservations about the powers that we allow for the recovery of two-thirds of the damages, which is over the amount of the damages allowed in this situation. [An HON. MEMBER: "Fines not damages".] Well, I have heard them called fines and other things as well. Presumably it is a penal measure in American legislation for those who have committed this act to get not only damages but some form of compensation arising out of a criminal act that has been committed against them.

The Under-Secretary of State for Trade (Mr. Norman Tebbit): The easiest way to put it is that we see nothing wrong with someone seeking recompense for damage that has been caused, but to seek, on top of that, twice as much again beyond the damage that was caused cannot be called anything other than penal. It is not compensation; it is a fine that is being levied.

Mr. Prescott: I agree that there may be strong disagreement in this country about that action. Certainly there will be strong disagreement over whether it should apply over our jurisdiction. That is a judgment that has been exercised in America and these are the kind of penalties that the Americans will impose, in commercial as well as criminal law, on those who commit this criminal act. Indeed, under their legislation it is considered to be a criminal act. Therefore, there is a dispute between us about what constitutes fair damage.
Nevertheless, if someone engaged in commercial business commits the act in America and no one in this country disputes that act, we would not dispute the

right of American courts to impose their penalties as they see fit.
The difference between the shipping companies and RTZ is that the shipping companies are active in America. They have offices and assets in that country. They are registered as companies there and they offer a service within American commerce of carrying goods from one point to another at a certain price. In the view of the Department of Justice that is done in a discriminatory manner. I think it is agreed that it is discriminatory. There is a difference in freight rates between east- and westbound traffic. The Department is entitled to argue that that causes damage against commercial activities. It seems that a case has been made by the Department of Justice that this act, illegal under United States legislation, took place in America. If one accepts that that is a possibility—and it is distinctly different from RTZ—then the Department has a case to apply United States law to an activity that occurred in that country.
Therefore, we should be asking whether all avenues were exhausted by all parties to this dispute. It is to the credit of the President of the United States that he vetoed a Bill from Congress with the express purpose of achieving this kind of discrimination and attacking the conference system. Presumably he vetoed it to get diplomatic negotiations going. When the Secretary of State was the Opposition spokesman, he welcomed this activity during our discussions on the Merchant Shipping Act. He referred particularly to section 31, in which we attempted to impose some provision in our legislation to judge what was "the national interest" in such matters. That matter is not included in this Bill, and the Secretary of State does not necessarily have the powers to assess it. The Conservatives were responsible for having this dropped from the Merchant Shipping Act 1978. The Opposition made it clear that we would not have got the Bill in the last few days of our Government unless we reached an agreement.
The House should be aware that the shipowners did not exhaust all the possibilities. I make this point particularly to hon. Members who are lawyers. If one looks at the legal case taken by the Department of Justice against the shipowners, one sees that it was not concluded.


The result was what is called nolo contendere. That meant that the shipowners were fined but not proven guilty. I think that the same case was used against Spiro Agnew. There was no doubt in many people's minds as to the verdict but it was not actually proven in court. Therefore, the shipowners could have pursued this matter in court had they so wished. They did not. They withdrew, and in doing so they did not exhaust all legal procedures that were available to them.
If the case rested on that point it might be a little alarming, but what is even more alarming is not that regulated trade is not possible in America—it is, and they, too, have the hypocrisy of announcing competition and allowing all sorts of regulations and protections—but that the shipowners had the possibility of going before the Federal Maritime Commission and making a case that this regulation of trade and prices was in the public interest. That is similar to the provisions in our own monopoly legislation.
We may declare something to be a monopoly but we do not necessarily say that it should cease if we believe it to be in the public interest. However, the shipowners did not take that course. It may be that they thought that providing information about their activities would be considered an illegal act in Britain. We have enacted that sort of legislation.
Is the Minister satisfied that all legal and other requirements were satisfied before the Government were asked to take such harsh action? I do not think that the shipowners have exhausted all the possibilities open to them. In my view, the House is being asked to act somewhat prematurely. The Minister's case is stronger than that advanced by RTZ, but it has not been substantiated.
When the Minister replies, I hope that he will be able to satisfy us that the practices of the conference system are in the interests of the community and that he has investigated them. If he is unable so to satisfy us, I hope that he will take up the suggestion that another body should be established to control and regulate the operation of the conference system. I hope that we are not too late to prevent the development of a trade war between ourselves and America in the name of competition. If that is the

outcome, both parties will find themselves in a somewhat hypocritical position.

Mr. Charles Fletcher-Cooke: All courts have, latent within them, a deep imperialism. They all wish to extend their jurisdiction. No court is more inclined to do that than one suffused with an ideology that is almost equivalent to a religion. Anyone who has talked to American competition lawyers, whether on the Bench or at the Bar, will know that the Sherman and Clayton Acts in the United States are the equivalent of holy books.
Once a court or a system gets an ideology into its mind to such a degree of fanaticism as one can find in the United States, it is no surprise, however deplorable it may be, that it becomes a matter for imperialism overseas. The gospel has to be spread to the pagan and the heathen. The answer is not to reason, although it is right that Governments should try. The only thing to do is to put in the boot. For example, it is no good trying to reason with the Ayatollah Khomeini. It is no good trying to reason with a fanatic. It has to be made clear that eventually the boot will be put in. That is what the Bill does.
Clauses 1 to 4 strengthen considerably powers that already exist. Clauses 5 and 6 take some drastic measures to ensure that the action for triple damages does not injure our traders.
I entirely support clause 5. It is in conformity with all the principles of private international law. I do not go so far as to say that the action for triple damages is contrary to human rights or is a cruel or unusual punishment. It is a well-known device of rather primitive Governments who wish to enlist the services of private citizens to police the public order that they think they are unable to police under the public services.
In Britain the common informer—whom we abolished only recently—often made quite a substantial living by informing on those breaking the law and recovering the fines for himself. He suffered no damage and he was allowed so to proceed because the public services and the police were inadequate to undertake the prosecutions themselves. Therefore, it


does not behove us to call these primitive methods of sanction for the enforcement of public order cruel, unusual or contrary to human rights.
There are many occasions in our system when we award damages beyond the loss sustained. Punitive damages are not unknown in our civil courts. In the courts of the Commonwealth, or the equivalent of them, such damages are quite frequent.
I had a case before the Privy Council in 1978 called Mahesan v. Malaysia Government Officers Co-operative Housing Society Limited, which is reported in the second volume of the All England Reports 1978, at page 405. There was in Malaysia a housing association which employed an officer who was corrupt. He sold some of the association's land, as he was entitled to do in law, but received a bribe from the purchaser. He was prosecuted under the Prevention of Corruption Act and ordered to pay the amount of the bribe to the association as well as a fine to the State. He was ordered to pay the exact amount of the bribe over to the association.
The association sued him in the civil courts for damages and recovered damages of the amount of the bribe. Therefore, he had to pay over the amount of the bribe twice. The only issue before the Privy Council was whether he should pay it three times because of various legal technicalities. No one seriously doubted that the association recovered twice for the damage that it had suffered from the land being sold at an under-value.
We cannot say that multiple damages are of themselves inherently wicked, because they appear in many systems of law in various forms. They are certainly penal. It is a rule of international law that no country's courts will be allowed to be used by other countries for the benefit of recovering penalties that are enforced by other countries. Clause 5 is satisfactory because it provides that damages that do not exactly equate with the damage sustained may not be recovered because that is in the nature of a penalty.
I know that there is a dreary case called Huntingdon v. Attrill which states that that principle is not right and that no civil damages for that purpose may be

described as a penalty. I believe that case to be wrongly decided, but that does not matter because the Bill, as far as it goes, will reverse it pro canto, and quite right, too. There is no earthly reason why our courts should be used as instruments for the recovery of foreign penalties. To my mind, two-thirds of triple damages is surely a penalty.
All that Huntingdon v. Attrill really provides is that "penalty" is an ambiguous word. It may mean a fine imposed by a criminal court. It may mean civil damages beyond the actual damage sustained, or it may mean a penalty prescribed in private contract between two private persons by which damages are set down in a large figure and liable to be recovered if there is a breach even though the actual amount of damage has not been sustained by the person injured.
All that may be interesting in a seminar, but there is no doubt in my mind that clause 5 does no violence to the general principles of private international law.

Mr. Prescott: The hon. and learned Gentleman has advanced an interesting thought. I have been told that triple damages first became evident in legislation enacted during the reign of Queen Elizabeth I about restraint of trade. It is something that is found in our own legislation, and the hon. and learned Gentleman has given a modern example of it. Does he feel that it is creating a precedent for those who might find themselves faced with triple damages under our legislation for an offence committed in Britain and will ask the Government to adjust laws to claim back their damages?

Mr. Fletcher-Cooke: In the laws of the United Kingdom, I do not think that we have the triple damage remedy. Damages, or what may be called damages, have been awarded to persons beyond what they have sustained. However, it is a small branch of our law and not strictly comparable. I was saying that in other Commonwealth jurisdictions it occurs more frequently.
I have certain misgivings about clause 6. It is one thing to say that we do not, like all civilised countries, use our courts to recover the fines, penalties or taxation imposed by other countries. It is no good seeking to enforce taxation levied


in the United States through the courts in this country. It is no good anyone in the United States trying to enforce in the courts of this country criminal fines that have been levied there, and that applies throughout the comity of nations.
However, as far as I know, it has always hitherto been the case that if, in one way or another, the country levying the fine or raising the taxation can recover that tax or fine from outside the country where the person being fined or taxed happens to be, it is not open to him to use the courts of his native country to reverse that decision and recover that fine. As far as I know, that has never been done. This is the first time that the rule against the enforcement of penal or taxation judgments has been turned on its head in that way.
If one looks at the confines of clause 6 and at subsections (2) and (3), it becomes apparent that the circumstances in which it is possible or likely for anyone to wish to recover the penalty of two-thirds of the triple damages are so improbable that I may be shying at a scarecrow. I am not sure whether that will be the defence of the Minister, because he would not have put in the clause unless he thought that it was useful, forceful and effective. However, it is so confined in its operation that it is unlikely to be seriously used.
Although it makes it less surprising, and perhaps less alarming, if I am right we have to consider whether it is worth it. Is it worth attracting a charge of counter-judicial imperialism for a relatively small, perhaps even negligible, result? I am open to persuasion that clause 6 is necessary and that a sword is needed in addition to a shield, and I shall be the first to cheer if I am so persuaded.
My right hon. Friend the Secretary of State has shown great courage in introducing the Bill. I do not wish to criticise the previous Administration or the one before that, but the Bill is long overdue. It is the only way to solve the problem and to show that we mean to defend our trading interests, and I wish the Bill well.

Mr. Eric Ogden: I apologise to the House and to hon. Members for my absence during earlier speeches. My agent came from Liverpool on urgent matters, and I believe

that all hon. Members would agree that in such circumstances one's agent should have priority even over the proceedings of the House.

Mr. Prescott: Particularly with reselection in view.

Mr. Ogden: Particularly with reselection in view. Man the barricades!
I was present when the Secretary of State spoke. He had to curb his usual wit and enthusiasm in order to perform his duty and to get the necessary points on the record, but he did not appear to be enjoying the experience.
The right hon. Gentleman surprisingly quoted the American Bill of Rights in support of the Bill. It was intriguing to hear a high Tory Minister—and that is intended to be a compliment—calling in aid legislation that was introduced by a legislature in rebellion against the Crown. We later recognised the inevitability of facts, but at that time it was in rebellion against the Crown.
The Secretary of State rightly said that the other maritime countries are equally concerned about the effects of United States legislation. Although the Bill does not mention any other country, it is obvious at which country it is aimed. It could include Ireland, although most of the traffic goes across the border, and it could be used against any country. The right hon. Gentleman was right in saying that we should not pretend.
The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) talked of putting the boot in. Some of those whom he has prosecuted say that when he wishes he can put the boot in most effectively. There was an American who believed in speaking softly but carrying a big stick, and perhaps the purpose of this legislation is that the British Minister can continue talking softy to the Americans but have in his back pocket at least a stick. We shall see how large it is.
Surely it would have been better if our maritime partners, let alone our EEC partners, agreed to bring in similar legislation at the same time. We are acting as a pathfinder to sort out the difficulties, and other nations may or may not follow.
I should like to know how far consultation with the Americans has gone and what stage it has reached with our maritime partners on the effects of the legislation and the need for it.
I was privileged to have a preview of the right hon. Gentleman's remarks in a speech that he delivered to the General Council of British Shipping on 7 November. Hon. Members with maritime interests were invited, and I was lucky enough to be free to go. My colleagues with Shadow ministerial responsibility had to leave to come to the House and they missed the right hon. Gentleman's speech. I thoroughly enjoyed the speech, and if the right hon. Gentleman had delivered that speech today I believe that the whole House would have enjoyed it. Perhaps he can arrange for it to be placed in the Library. That does not mean, however, that I agreed with everything that the right hon. Gentleman said, but he displayed dexterity in answering some of the president's points.
The president first gave his usual report on the state of the industry, which I call the rolling programme. It is said each year that it is hoped that the shipping scene will get better. Perhaps it will, and perhaps it will not, but the crisis remains. The right hon. Gentleman followed the president and, in the sharpest bit of sidestepping that I have seen for many a year, almost avoided the mention of future problems for the British shipping industry. He said:
It seems that, not for the first time, the financial and industrial forecasters are united in their anticipation of impending doom—which gives me some encouragement.
I never knew a shipping man who'd made his fortune by following the prevailing opinion of the market; any more than I've ever met a Minister who'd enhanced his reputation by gazing at the vital statistics exhibited by our country's leading models.
The right hon. Gentleman touched on the problems of the shipping industry. Indeed, he might take the opportunity today to do the same. Of course, Mr. Deputy Speaker, you may rule that the debate is not concerned with the problems of the shipping industry. However, it concerns the protection of the interests of the British shipping industry, and some reference to it either now or in Committee—for those hon. Members who are fortunate or unfortunate enough to be on that Committee—will be useful.
The right hon. Gentleman told the assembly of about 1,000 people exactly what they wanted to hear. There was no one there to ask the right hon. Gentleman to give way and to ask "What about

this and what about that?" It was a masterly performance which I thoroughly enjoyed. In parts of it there was almost a touch of Merseyside—I hope there was. The right hon. Gentleman almost admitted that he would have opposed the Bill if it had been introduced by a Labour Government. We are committed to intervention and more controls and against free market forces; and I could understand a Labour Government introducing the Bill.
Yet here we have a Conservative Minister, a hawk—that is a compliment to him—introducing legislation the intention of which is to limit competition. If the Bill is to protect British interests, from what are those interests being protected? Perhaps the American ambassador will write to the members of the Committee telling them about the legislation. I understand that the anti-trust laws of the United States prevent free competition in that country or anywhere else. Therefore, we have a Conservative Minister standing on his head, smiling benignly at me, and practising the opposite of what he preaches in this country. It would be good of him to admit that fact.
We should give the Bill a Second Reading and leave hon. Members such as the hon. and learned Member for Darwen to examine the Bill in Committee with full flow. The Committee stage should be an enjoyable experience.

Mr. Ivan Lawrence: I shall not attempt a full flow. Even if I did, I could riot match the eloquent speech of my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke). Time is short and Government business presses.
It is unfortunate that in this one area of substantive criminal law in which the Americans go further than we do—their anti-trust legislation—they should be using it to clobber the closest friend and ally that they have. It is a cruel stroke. As long as United States law is confined to the boundaries of the United States, foreign companies cannot complain about its operation. They take into account, as part of the cost of doing business in the United States, any restrictions in that legislation. No hon. Member objects to what is rightly and properly within the jurisdiction of the United States courts and legislature.
However, when the United States extends its laws to reach foreign companies conducting business outside the United States, that is inexcusable. It is intolerable that the enforcement of that law should be made penal. We are entitled—nay, obliged—to defend our citizens. My only astonishment is that it has taken so long. My right hon. Friend referred to a decade or more before this unhappy position has been reached. I regret that diplomatic action has failed to protect British companies from the unreasonable affects of United States law.
It is difficult to understand why the United States law is allowed to operate in this way. Rebating is legal in Europe, and we are doing no more than is permitted under our traditional and reasonable laws. Yet here is a direct attack upon our national legislation, and the Americans should expect us to be angry and to react by protecting ourselves.
By and large, the Americans are understanding towards us. They would not tolerate our behaving in relation to their citizens in the way that they are behaving in relation to ours. I cannot think of any of our legislation which is harmful to the Americans. If there were any such legislation, I do not believe that they would tolerate it for one moment. We know our American friends well enough to be able to say that. They do not normally behave in such an inequitable way.
The Shipping Act 1916 allows shipping lines to behave in an uncompetitive way in circumstances where the behaviour meets with the acceptance of the Federal Maritime Commission. Therefore, the Americans are prepared for the distortions and it is strange that that tolerance has not been extended to the subject of today's debate. I am even more astounded that the Americans should put up with the effects of their policy. They allow a defence to trading companies where those companies have been coerced by their Governments to behave in a way which, otherwise, would be contrary to the American rules. The astonishing effect is that State trading nations are favoured and free enterprise traders are handicapped. Russian and OPEC shipping companies are exempt from the restrictions that are placed on us. However, when a free enterprise nation such as

Britain, with a free enterprise company such as Rio Tinto-Zinc, is concerned, the clobbering process is introduced. As a result, heavily subsidised Soviet ships have captured trade from Western shipping lines. A recent letter in the Financial Times from the president of the General Council of British Shipping, Mr. David Ropner, pointed out the absurdity of the effect of the American legislation. He said:
The Administration's one-sided view of shipping matters made normal sea trade with the US commercially impossible.
I find it difficult to understand why the American Administration should tolerate that position. The outcome is that many ships are running half-empty, which means that they are wasting substantial amounts of fuel and incurring severe losses. It is estimated that without the deterrent effect of the anti-trust regulations, there could be a 10 to 15 per cent. increase in the Western allies' sea trade with the United States of America. Depression in merchant fleets also damages an important strategic sector of NATO. Since that is the effect of the American policy, it is incredible that they should be pursuing it and that no steps to protect the interests on their side have been taken.
I understand that the American dockers' organisation is concerned about the policy and that moves are afoot in Congress to consider the matter further. I hope that, in due course, the Americans will change their attitude towards these British commercial enterprises.
May I ask the Minister one or two questions? First, is it right that some European Governments have similar legislation to this Bill on their statute books or that they are in the process of implementing it? That would make our action so much stronger in the sense that we would be united with our European partners. Secondly, I am not sure how far this Bill will affect those cases currently before the courts. My right hon. Friend mentioned the subject in his speech but I would like to know more—

Mr. Nott: This point has been raised several times. All precedents have their birth and their glorious morning. Somebody has to be first. Although it would be good if we could move forward wholly in unison and in time with our European partners, we are still a legislature and someone has to be first. I am not arguing


with my hon. Friend. I am answering a question that has arisen repeatedly. We have done our best to keep our allies fully informed. I have written personally to the Prime Ministers of Australia and Canada and discussed the matter with them. In answer to my hon. Friend's first point, all precedents start somewhere. I felt I should answer that point straight away.

Mr. Lawrence: I hope that my right hon. Friend did not gather from the tone of my remarks that I was being critical of him. I am delighted that any radical first step should be taken by us. I am only sorry that we have not taken more radical first steps. We would then perhaps have been leading Europe. I have a suspicion that European countries are either implementing similar legislation or have it in mind to do so. Our approach, therefore, would have added strength because the Americans would appreciate that we speak with the force of a united Europe.

Mr. Ogden: I hope that I may be allowed to intervene in this love feast between the right hon. Gentleman and his hon. Friend. The Secretary of State gave a perfect parliamentary answer. It was accurate, concise and told us nothing that we did not know before. He was asked whether any other countries in Europe, or elswhere, have similar legislation. The right hon. Gentleman did not answer. He was asked whether any other countries were preparing such legislation. There was no answer. The right hon. Gentleman simply said that someone has to be first and someone last. It was accurate and concise. The Under-Secretary of State for Trade, who carries considerable burdens in his office, for which we have great sympathy and understanding, may be persuaded to give the answer that the House seeks.

Mr. Lawrence: The length of time taken by the hon. Member for Liverpool, West Derby (Mr. Ogden) in that intervention, added to the length of time that I will take to conclude my remarks, will give enough time for my hon. Friend to assemble the complete and authoritative answer when he comes to address us. I think I have adequately made the point of asking how the Bill will affect cases currently before the courts. I hope that there will be a reply.
Thirdly, I associate myself with the remarks of my hon. and learned Friend the Member for Darwen on clause 6. I cannot pursue his remarks about the effect on international law and its complete new radical approach, because his knowledge of the subject is far deeper and more extensive than mine. I am, however, puzzled, about how this clause is expected to operate as a matter of practice, how it can be enforced and what would be the procedures. I hope that the Minister will explain.
The Bill is another example, I am delighted to say, of a robust Government acting in an entirely justifiable way in an act of national self-protection. I am delighted that the Opposition have had the good sense to support it and to support the robust action of the Government. I only hope that the United States will take this legislation to heart and do nothing in the future to make it necessary for us to invoke it.

Mr. Jeffrey Thomas: This has been an interesting and thoughtful debate on a matter that has become of increasing public importance. I look forward to hon. Members developing their arguments when we reach the Committee stage. It has to be said at once that this is a wholly exceptional Bill to meet wholly exceptional circumstances. Clauses 5 and 6 are not only exceptional and far-reaching in their nature and effect but are unique in English law. They are none the worse for that. Although they will raise a legalistic eyebrow or two, I hope that they will not founder on the rocks of legal purism.
I should perhaps begin by congratulating the Secretary of State on taking the first step along the interventionist road. It was only in July that the right hon. Gentleman was saying that competition in the market place was the best protection for the consumer against abuses by producer or distributor. I remind him of that in no carping or critical way. As he knows, the gates are always wide open for sinners who repent. Who knows? Before we can say "Price Commission" we shall have a Protection of Consumer Interest Bill and measures that make the United Kingdom multinational companies which we seek to protect in this Bill more accountable to the public and their work forces.
The object of the Bill is to provide a measure of protection and redress to United Kingdom companies and individuals against prejudicial exercise of extra-territorial jurisdiction by foreign States. We must not be mealy-mouthed. We mean, especially, the United States of America. The Bill is necessary because of the exercise of such jurisdiction by United States courts against United Kingdom companies in anti-trust proceedings. As we have been told, the toughest enforcement provision is the right given under the Sherman Act of 1890 and the Clayton Act of 1914 to a private person or company who suffers damage as a result of anti-trust violations to sue offenders and recover "threefold the damages by him sustained". Those are draconian measures.
Matters came to a head with the hearing of the case of RTZ and Westinghouse. In the course of his speech in that case, Lord Wilberforce said:
The intervention of Her Majesty's Attorney-General establishes that, quite apart from the present case, over a number of years and in a number of cases the policy of Her Majesty's Government has been against recognition of United States investigatory jurisdiction extra-territorially against United Kingdom companies. The court should in such matters speak with the same voice as the Executive. They have … no difficulty in doing so.
With the increasing development and complexity of international trade and transnational companies, it is inevitable that commercial activities, decisions, agreements and practices carried on, or made, in one State should have effects in another. It is likewise to be expected that authorities charged with regulating trade and business in the latter State should wish to have some degree of control or regulation over such extra-territorial activities. It is a vital principle of international comity, however, that exercise of that control or regulation by the first State should not infringe the jurisdiction or sovereignty of the second State, and so avoid international trade being detrimentally affected. It is important that the Bill should be regarded by our trading partners not as an exercise of economic nationalism but as a measure that fosters international trade.
I turn briefly to the clauses of the Bill. I hope that the House will forgive me if I do not canvass each of the clauses in detail or depth. It may be thought that

this could be more appropriately and speedily done in Committee. I hope that it will be helpful if I refer to one or two matters which cause us concern so that they may be considered between now and when we meet in Committee.
In clause 1 the term "overseas country" should be expressly defined to ensure that it means a law district, not a political unit. If it is interpreted in the latter sense there will be problems in deciding what, for example, is the law of the United States where there is not only federal but state law.
I should like to refer, among other things, to the point made by the right hon. Member for Crosby (Mr. Page) on the wider provisions and effects that the clause could have. I hope that the Secretary of State will use his power under the clause, which is not inconsiderable, with regard not only to anti-trust or competition law measures but to all foreign measures damaging to United Kingdom trading interests—for example, foreign expropriatory legislation purporting to affect United Kingdom-situated assets. I hope, too, that measures will be taken under this clause to counter unitary taxation measuers taken in some jurisdictions, such as California, against United Kingdom companies. Thus, a company—as happened in the the case of EMI—may be taxed on its worldwide profits both in California and in the United Kingdom.
Clause 2, which we welcome, is extremely important. In circumstances where the Secretary of State has issued a direction, there will be no need for persons in the position of RTZ in the Westinghouse case to resort to complex defences, such as privilege under the United States Fifth Amendment, to resist the production of documents. I have some reservations about the inclusion of such a politically charged word as "sovereignty" in the Bill. I believe that it is almost unprecedented and is bound to lead to problems of construction and interpretation.
The ultimate test on the discovery of documents was laid down yesterday in their Lordships' House. They decided that the test was whether discovery was necessary for disposing fairly of the proceedings. The situation in America is wholely different from that envisaged by the House of Lords.
The mischief aimed at in clause 2 is the American law relating to discovery documents, which allows wide-ranging fishing expeditions which often amount to industrial espionage hiding under the skirts of the so-called anti-trust rules. I fear that a number of difficulties will arise under this new provision.
The heart of any American trust case is the discovery of business documents. Without them, in many instances there is virtually no case at all. Recently there have been signs that foreign non-disclosure laws have, as a practical matter, become ineffective as constraints on extra-territorial application of the United States anti-trust laws, especially where a parent company has its headquarters in America. In that context I should like an assurance from the Minister that in future it will be a complete defence to requests for discovery of documents to plead the terms of this clause and the penal clause—clause 3.
I add my own disquiet and disappointment that these matters could not be solved by international agreements. From an international law standpoint, I am also not happy that criminal laws and courts should be used for these ends, although their use in this way serves policy objectives important to the country involved. In a sense, international law is poorly served as legal institutions are converted into political and diplomatic policy makers and enforcers. Perhaps in the circumstances that cannot be helped as many efforts have now been made over many years to deal with the problem, as was pointed out by the Secretary of State and by my right hon. Friend the Member for Lanarkshire, North (Mr. Smith).
As regards clause 3, I am a little unhappy that magistrates may be determining issues where complex defences might be raised by defendants—for example, ultra vires matters, and so on. It will be interesting to know the classes of cases which the Secretary of State and the Under-Secretary envisage magistrates hearing, bearing in mind that the maximum penalty is only £1,000.
We suggest that the second limb of clause 5—subsections (2)(b) and (4)—is unsatisfactory. In our view, the Secretary of State should be empowered to make orders under subsection (4), not in respect of the provisions or rules of law referred to but in respect of particular objectionable

judgments based on the provisions or rules of law referred to. As it is drafted, the Secretary of State could make an order under subsection (4) which, in the light of subsection (5), could deny recognition to any foreign judgment, objectionable or not, based on the provisions or rules of law referred to—that is, in effect, to any foreign judgment in relation to restrictive practices.
The subsection is too wide to deal with the mischief aimed at, namely, particular judgments. Moreover, unless power were given to the Secretary of State to make an order in respect of particular objectionable judgments, it would be arguable that the judgment did not, as a matter of construction, fall within the terms of the order made. Further, an order made under the subsection, as drafted, could lead in cases within the scope of the competition provisions of the Treaty of Rome to inconsistency with the latter. In fact, the equivalent Australian statute enables recognition to be denied to particular objectionable judgments.
The second limb of this clause is also unsatisfactory. In subsection (4) the power to make the order there stated extends only to provisions or rules of law, in effect, relating to restrictive practices, not to provisions or rules of law relating to monopolies. Therefore, there should be power to make an order to extend to the latter.
My right hon. Friend the Member for Lanarkshire, North and hon. Members on both sides of the House have expressed disquiet about clause 6. I add my voice to those misgivings. I have general misgivings, but I am unhappy about the way in which clause 6, as drafted, can operate in practice. It seems to me that the scope of recovery needs to be enlarged. As drafted, the clause enables recovery only against the party in whose favour the judgment was given. If that party were not in the jurisdiction of the United Kingdom, the right of recovery presently given would be nugatory. For example, foreign States would be unlikely to recognise a United Kingdom judgment ordering such recovery.
Moreover, corporate parties given a multiple damages judgment against a United Kingdom individual in a foreign State could prevent recovery back of damages against them by the United Kingdom individual and enforcement of the latter


damages award against their United Kingdom assets by the simple expedient of operating through different corporate entities in the United Kingdom. It may be that to forestall the latter the word "party" in clause 6(1) needs to be defined to include an associated or subsidiary company.
Some of those observations were perhaps primarily Committee points, but I thought that it might be helpful if I mentioned them at this stage so that they could be investigated between now and the Committee stage.
On the whole, we welcome the Bill, even if our welcome is tempered by our apprehension about how it will operate. However, it is refreshing to see that the Conservative Party has been converted to interventionism on the road to America. It is equally refreshing that this Government—of all Governments—should be seen to be cocking a snook at the high priests of capitalism. I suppose that they have come to the sad realisation that when capitalism gets out of control, and the free play of market forces becomes rough, measures such as these are required as necessary panaceas. We hope that this is the first of many U-turns by the Government.

The Under-Secretary of State for Trade (Mr. Norman Tebbit): As the hon. and learned Member for Abertillery (Mr. Thomas) says, here comes the first U-turn. I shall be as soothing, reasonable and understanding as all those hon. Members who have spoken in this debate have been. If I may say so, their speeches included the odd U-turn here and there.
I hope that I can adequately express the Government's gratitude to the right hon. Member for Lanarkshire, North (Mr. Smith) and to his hon. and learned colleague. I appreciate especially their measured and constructive welcome of the Bill. As the hon. and learned Gentleman said, many of the points that he raised would, I think, be best dealt with in Committee after a suitable pause for thought. I can deal straight away with one or two of his queries. I shall turn to others later.
The hon, and learned Gentleman was particularly concerned with the provision in clause 2 designed to prevent fishing

expeditions. We believe that there is adequate protection here since clause 2(2) provides that the Secretary of State may give a direction forbidding the passing of information if the relevant demand infringes United Kingdom jurisdiction or is prejudicial to the sovereignty of the United Kingdom.
I notice that the hon. and learned Member reacted to the use of the word "sovereignty". No doubt that is a matter which can be explored. Perhaps there is a better way of expressing it. Perhaps we can see whether compliance would prejudice the security of the United Kingdom or international relations.
Clause 2(3) provides that a demand is also inadmissible in all other circumstances unless information is required for the purpose of specific court proceedings as defined in the subsection. There is bound to be a grey area where information is merely requested. If no compulsory powers exist in the country from which the demand originates, the United Kingdom person is under no obligation to reply anyway. We are satisfied that the subsection gives us adequate powers to prevent fishing expeditions. We are prepared to examine the question again in order to confirm that and to take into account what hon. Members say in the Committee.
I particularly noted the hon. and learned Gentleman's contribution about the dangers of confusion between political units and law districts in those countries which have a federal law system. We understand that. The hon. and learned Gentleman also asked about the unitary tax point. It is possible, under section 2, to deny to a foreign Government papers which are called for. Such a request could be denied even though the purpose was not for the regulation of trade but was, as in the case mentioned by the hon. and learned Gentleman, a request for information for unitary tax purposes.
The hon. and learned Gentleman also raised the important question of whether the provisions of clause 2 afforded an absolute defence to a United States discovery requirement. I am not even an English lawyer, let alone an American lawyer, so I think that it would be hazardous if I said that they positively did so. We cannot necessarily guarantee the kind of treatment that would be accorded by a United States


court to persons from the United Kingdom who might be prevented from complying with the discovery requirement. However, we would expect recognition to be given to the fact that a prohibition was in force and that a breach of that prohibition would expose the offender to criminal penalties in his own country. Such a situation has prevailed in the past, and I hope that it will continue in the future.
My hon. Friend the Member for Burton (Mr. Lawrence) asked whether other members of the European Community had similar legislation. It is a complicated picture. There is a wide range of legislation among Governments and, as I sought through the various pieces of advice and my own recollections on the matter, I can say that this is the position. Several other European countries, for example, the Netherlands, Switzerland and Norway, have similar statutes on blocking the passing of information. Australia, Canada, South Africa and some other countries also have similar laws. Australia and South Africa have provisions restricting the enforcement of triple damage judgments but on a rather more limited basis than the provisions in our Bill. We think that at least four other countries—three in Europe and one elsewhere—are considering legislation on the enforcement of judgments. However, we have no firm knowledge about how far they have gone down that road.
Therefore, we are pioneers in the sense that we are somewhat ahead of most other countries. It is fair to say that we are not so far out as to be isolated, nor are we moving against the stream. Rather, we are one of the leaders in the stream of legislating in this respect. My. hon. Friend the Member for Burton also asked to what extent, if at all, this legislation is retroactive. There is a difference between clauses 5 and 6 in this respect.
Clause 5 is not retroactive and does not seek to undo any overseas judgment for multiple damages which might have been enforced by the United Kingdom courts. An overseas multiple damages judgment which might come before our courts for enforcement could still be enforced either by registration or by giving a finally determined judgment up to the time when the Bill becomes law. There is, therefore, no element of retroactivity. Somewhat differently, clause 6 goes a little further.

Clause 6(4) does not apply to any judgment given before the passing of the Bill. My hon. Friend will see, therefore, that there is a difference between the two.
Clause 5 ensures that even when a judgment has been given in the country concerned it cannot be enforced unless it has been before the British courts before the date on which the Bill becomes law.
My hon. Friend said that he was puzzled about how this will operate in the courts. My hon. Friend is a lawyer. If he finds the operations of the courts puzzling, who am I to disagree? There is ample room for discussion in Committee about the way in which the provisions in the Bill will come before the higher and lower courts.
I welcome much of what was said, with his usual good humour, by the hon. Member for Liverpool, West Derby (Mr. Ogden)—a curiously named constituency. He asked how far consultations were progressing with the United States authorities and our maritime partners. He suggested that it might be better to await European Community legislation rather than for us to be pathfinders. I am not sure whether he meant that we should wait for the Commission to propose measures or for our partners in the Community each to propose its own measures. Several of our partners in the Community already have such measures, some of which go even further.
Many of us have reservations about waiting for the Commission to propose measures, not only because of the delay involved but because of the implications of the extension of competence. It would be wrong to extend competence in such a wide area on this issue, which we hope is a passing problem and not a permanent attitude by the United States authorities.

Mr. Ogden: I thank the Minister for the care with which he responded to my question. However, he said that my constituency was curiously named. That could be a term of admiration or a term which would not be appreciated at home. My constituency was the Hundred of West Derby, which was an ancient part of Merseyside long before the port was established. The land was owned by the Stanley family—the West Derbys—and the King of the time would not allow the Derbys to be concentrated in one part. He wanted them spread round. I have


been called to talk about foot rot and sheep dips, but I hope that the Minister did not mean to criticise my constituency.

Mr. Tebbit: Good gracious, no. As always, the remark was made in friendliness and in pursuit of knowledge. I have indeed gained in knowledge. Chingford certainly does not wish to extend its jurisdiction over Liverpool.
I return to more serious matters. The issue is: to what extent have we consulted the United States authorities and our maritime partners? We have consulted almost interminably with both. Those consultations continue.
Only a few weeks ago the consultative shipping group returned from consultations in Washington with the United States Government. I wish that I could assure the House that the group had made more progress. It made some progress and it did not go backwards, which we feared it might at one time. I suspect that there will be a greater willingness to discuss these matters now that the Bill has been introduced and received a general welcome from both sides.

Mr. Clinton Davis: At the beginning of the debate my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) referred to the support given at Question Time by the Secretary of State for the proposition that on its merits some degree of independent scrutiny of the conference system was justified. That should be debated seriously with the United States authorities.
I have seen some records of the consultative shipping group's discussions in the United States. It seems that that matter has not been taken on board seriously. Is there a division within the group about the merits of the proposal? Should not the Government use every endeavour to persuade those in the consultative shipping group that to avert their gaze from this necessary step is counter-productive?

Mr. Tebbit: I had not forgotten what the right hon. Member for Lanarkshire, North said. I shall be dealing with it later. I do not believe that there is any great division in the group about this matter. We are not opposed to greater transparency and openness, or even to a degree of supervision of the conference system. We feel strongly that this must

be achieved by international agreement, We are willing to have consultations with the United States authorities. We hope that if we do have consultations they will be held with the intent of reaching an agreement and that the United States will pull back from this exercise in extraterritorial jurisdiction.
My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) raised some interesting questions, particularly about a case in which he was involved. He referred to a law report published in 1978. That is the sort of book that I cannot go to bed without. He agreed that the extra element of damages is penal. He explained clearly that our courts do not enforce, and never have enforced, foreign public penal laws. That is the essence of clause 5.
My hon. and learned Friend said that clause 6 contained confined powers and that this was because of its drafting. He wondered whether it was worth attracting the charge of counter-imperialism for what he saw as little gain. We shall seek to discover in Committee who is seeing the matter most clearly. It will not be easy for people to recover those punitive elements of damage, but even in their restrictive form it is right that the powers should be there.
If the Committee believes that those powers are too narrow, we might be able to widen them a little. It would be dangerous to think too much about widening powers which are at least novel, if not unprecedented.
My right hon. Friend the Member for Crosby (Mr. Page) also welcomed the Bill. He said that it was overdue. He wondered whether clause 1 was effective because subsection (1) was drawn so tightly. I believe it is right that it should be tightly drawn, and to some extent it has to be looked at together with clause 2. He asked whether United States fines would be registered for enforcement in the United Kingdom. Again, the answer is "No". If he means penal fines, those would not be so registered, because we would not enforce a criminal provision of that kind. He raised a number of important questions concerning the way in which United Kingdom subsidiaries of United States companies might be affected. I suggest that he leaves those details to the Committee stage.
I have already dealt, at least to some extent, with my right hon. Friend's question about the California unitary tax system so far as the Bill affects it. We would be able to resist the calls for documents to be produced, but of course this is not directly aimed at that unitary tax system. We must resist the temptation to be ourselves tempted into extra-territoriality. He asked, too, whether we could refuse to make documents available to the United States from United Kingdom parent companies. Clause 2(1)(a) deals with that subject.
The hon. Member for Kingston upon Hull, East (Mr. Prescott) took the line that the shipping interests and the national interests are not necessarily identical. I am not sure whether he went so far as to see something inherently wrong in our protection of our own shipping industry, but I beg him to consider whose interests are adversely affected or would be adversely affected if we did not protect in this manner.
The interests that would be principally affected are those of our seafarers if we did not act in this way, as well as, of course, our merchant shipping owners. I believe it is right that we should continue to protect them against unfair competition and against the unfair use of legal powers abroad. If the EEC should at some time design a competition policy for the shipping sector, it would of course be an agreed policy between partners in the Community, but I believe that that is a very long way away, if it is ever to come. Our problem with the United States is not really over its competition laws. Those may be very well suited for the United States, and it is a matter for that country. The only row we have with the United States is that we do not believe that it is a good thing for it to export its laws to us. It is as simple a matter as that. We are not disposed to criticise its laws on competition in general, although we have some reservations about the principle of triple damage suits to the extent that we would not allow them to be enforced in our courts.

Mr. Prescott: I do not really need to be lectured about the interests of British seafarers. I believe my record will stand on its own. The point I asked the Minister

to accept was this. If the activity of British shipping companies, as members of the consortium, took place on American territory—as indeed it did—and that action was concerned in trading in one form or another, surely it would be right for the American courts to apply their laws to that activity.

Mr. Tebbit: There are two points at issue there. First, at least half of the matters which were at issue took place outside the United States, and, if one took those matters out of the consideration, the remaining matters would not have constituted a case for the United States authorities to proceed upon. Secondly, we are firmly of the opinion that it is not only a matter of extra-territoriality. In the forum of the consultative shipping group, the 13 major trading partners of the United States, we have been in discussion with the United States for two years to try to sort out the shipping problems between us.
Officials of my Department visited Washington very recently, as I have said, but the United States has refused to talk reasonably with us about a joint approach and has actually shown considerable reluctance to continue discussions from time to time. Therefore, we are discussing the United States not only exporting its laws to our territory, but refusing to discuss in a reasonable manner how we should regulate trade between the two countries. I fully accept, as the hon. Gentleman said, that the RTZ and the shipping cases are very different, and I am glad that he said that. He expressed his reservations about clause 6 and asked whether we negotiated with the Americans. Good gracious! We negotiated and negotiated, but at the end we could not get anywhere.

Mr. Lawrence: May I ask my hon. Friend a question on this point of negotiation? My right hon. Friend was courteous enough to set out the proposals that are embodied in this Bill in a speech he made, I believe on 14 September, in Los Angeles to the Anglo-American Chamber of Commerce. Did anthing happen? Was there any response from the Americans between 14 September and the introduction of the Bill in this House to give us any cause for believing that the Americans were taking seriously what we are about to do?

Mr. Tebbit: To be fair to the United States authorities, what my right hon. Friend did not mention in his speech in Los Angeles were the provisions of clause 6 of the Bill. It is those that have caught the attention of the Americans principally. There is a lot of American territory to cross before one gets back home. It is also true to say that the Permanent Secretary at the Department of Trade subsequently had further discussions in Washington, but unfortunately those did not make the progress for which we might have hoped.
Finally, dealing with the points raised by the hon. Member for Kingston upon Hull, East, the shipping companies in the action concerned did not defend themselves in the courts because of the crippling costs involved. They did not admit guilt. They were not found guilty. They agreed to pay a fine to see an end of the matter and it was the maximum fine that was possible that was imposed upon them. They then believed that that had ended the matter; but then the Justice Department, having heavily fined them, let go and the Federal Maritime Commission moved in, and behind the FMC there moved in about 30 private interests all with triple damage suits.

Mr. Prescott: I understand that the dispute has been with both the Federal Maritime Commission and the Department of Justice. They are separate agencies in this action. My part of the argument was that, whatever the outcome with the Department of Justice, the hon. Gentleman, and the shipowners, could have applied to the Federal Maritime Commission, which has been trying to get information about this practice, to judge whether it is an illegal practice or a regulated trade with which it can agree. Had they done that, perhaps the FMC might have agreed and we would then not have been here discussing this kind of legislation. They did not seek to do that. They came to the hon. Gentleman for this kind of legislation.

Mr. Tebbit: No, that is not so. They did not come to us for this kind of legislation. They were picked on by the United States Justice Department, and, as the hon. Gentleman says, the FMC is a separate part of a body politic which seems to have some elements of being spastic in it, in that the centre does not control all the limbs. There was a degree of expectation

that, after the Justice Department had inflicted the fines, the FMC would not proceed. There is a good deal of material which I could go on to quote, but I will not do so because otherwise the House might feel that it was tending to become a little tedious. That material suggests that the United States Government are well aware of the difficulties which arise when various enforcement agencies go their own way in what I would describe as a somewhat spastic manner.
I think that I have now dealt with almost everything except the remaining points raised by the right hon. Member for Lanarkshire, North. I hope to do that if I can find the appropriate piece of paper.
I speak for the Government as well as for myself. That is sometimes an inhibition. However, I hope that the House will bear with me.
I am glad that the right hon. Gentleman agreed basically with the Government's position on clauses 1 to 4. Referring to clause 5, he asked whether its provision put the existing law beyond doubt. It does just a little more than that. Certainly it does that, but it makes plain that those judgments cannot be enforced in the British courts. He referred to clause 6 as giving United Kingdom companies the right to hit back. I am not sure that I would go as far as that. After all, those companies are only grabbing back their own wallets. That hardly comes under the heading of hitting back—and not even the whole contents of their wallets are involved.
The right hon. Gentleman criticised clause 6, saying that it was not to any extent controlled by the Secretary of State. I have a long and involved answer to that. However, in essence, my short answer is that clause 6 gives a civil right to United Kingdom persons. It would not, in general, be desirable for the Secretary of State to have powers to limit or authorise the exercise of that civil right. The right hon. Gentleman asked whether there would be tit-for-tat actions—or hostile ping-pong diplomacy, I suppose. We very much hope not. We trust that the United States authorities will see the dangers of that and avoid entering a legislative arms race with us. Perhaps they might be prepared to discuss a legislative SALT agreement at some time and get out of this race.
The right hon. Gentleman mentioned the independent supervision of shipping contracts. I think that I have already dealth with that matter reasonably. I assure him that we are—just as he did when he was Secretary of State—always trying to reach agreement with the United States authorities.

Mr. Prescott: If the Minister is prepared to say that the Government are prepared to co-operate in that, does that mean that if the Federal Maritime Commission want to obtain information from British companies in this consortium to make an assessment, which is the case, the Government will encourage British owners to give that information to them?

Mr. Tebbit: No, indeed. That would be the FMC trying to make rules on the basis of information that it was taking from the United Kingdom. If the United States authorities wish to come to an agrement with us, we shall bring with us information that is relevant to the discussion of that agreement. We cannot give the United States authorities a right to demand information from companies in the United Kingdom over which we say they have no jurisdiction. That is virtually the end of the matter. There is no more room in which to scatter any more papers.
If I may conclude on the note on which I began, I thank all Members who spoke in the debate for the constructive manner in which they did so. If they believe that we may have been a little precipitate in what we are doing in relation to the United States, I remind them of this. The late Sir Winston Churchill said that jaw-jaw was better than war-war. For years we tried jaw-jaw. We have now been driven to law-law. That is the situation in which we have landed. We hope that the American authorities will notice our reluctance and draw the conclusion that it is for them now, in the fullness of time, after the Bill is enacted, to come forward with their ideas on how we should proceed beyond that.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — PAPUA NEW GUINEA, WESTERN SAMOA AND NAURU (MISCELLANEOUS PROVISIONS) BILL.

Order for Second Reading read.

The Minister of State, Foreign and Commonwealth Office (Mr. Peter Blaker): I beg to move, That the Bill be now read a Second time.
The essential purpose of the Bill, in the words of the long title, is to
Make provision in that connection with the attainment by Papua New Guinea of independence within the Commonwealth and with the membership of the Commonwealth of Western Samoa and Nauru.
Before describing the contents of the Bill, I shall say why it is being introduced. When British colonies achieve independence and become members of the Commonwealth, the independence Acts in respect of them include consequential amendments to, or repeals of, United Kingdom legislation to place them on the same footing as other Commonwealth members. But when a colony or trust territory has been under the administration of another member of the Commonwealth and has been brought to independence by that State, there is obviously no United Kingdom independence Act. Separate legislation in the United Kingdom is therefore necessary to make the usual consequential modifications to our law. All these three territories fall into that category.
Papua New Guinea became independent on 16 September 1975 by the authority of the Australian Parliament and became a member of the Commonwealth on the same date. We therefore need to amend the relevant United Kingdom legislation as soon as we can.
The Bill also takes the opportunity to regularise the position of Western Samoa and Nauru. Western Samoa was granted independence by the New Zealand Parliament in 1962 and achieved full member ship of the Commonwealth in August 1970. Nauru was granted independence by the Australian Parliament in 1968 and achieved special membership of the Commonwealth later that year. Perhaps I should mention that the qualification of Nauru's Commonwealth membership as "special" means only that she does not


participate in full meetings—as distinct from regional meetings—of Commonwealth Heads of Government.
All the amendments to our legislation that are provided for in the Bill flow automatically from the achievement of independence and membership of the Commonwealth of these countries. They follow a well-established pattern. But there is one particular problem that the Bill has been designed to overcome, namely, that of the national status of the citizens of Papua New Guinea, Western Samoa and Nauru in United Kingdom law.
Until these countries are designated members of the Commonwealth for the purposes of the British Nationality Acts, they are foreign countries in that context and their citizens are aliens in United Kingdom law. Accordingly, there is a clause in the Bill that adds these three countries to the list of Commonwealth countries in the British Nationality Acts and thus makes their citizens Commonwealth citizens under United Kingdom law.
It would not be appropriate, however, to make this provision retrospective to the date of Commonwealth membership of each of the three countries. Retrospective provision would cause confusion by altering the status of citizens of the three countries as already applied under existing immigration laws and in other spheres. As an example, leave of entry to the United Kingdom given under the Aliens Order 1953 would no longer be valid for a person who became retroactively a Commonwealth citizen.

Mr. Tam Dalyell: What are the numbers? I understand the issue of retrospection. Has there been any pressure on retrospection—or is that an academic point?

Mr. Blaker: That appears to be an academic point. We are putting right a situation that has not in practice given rise to problems but could theoretically do so.
The Bill has also been designed to avoid the anomalous situation that births of children of citizens of the United Kingdom and Colonies, and deaths of such citizens occurring in Papua New Guinea between independence in 1975 and the date of the Royal Assent to this Bill,

would have had to be entered in British consular registers that apply to foreign countries. No such register exists in Papua New Guinea, as our office there is a high commission rather than a consulate.
Normally, such births and deaths occurring in a Commonwealth country would be entered in British high commission registers. The Bill therefore provides that births and deaths of the categories of people mentioned occurring in Papua New Guinea on or after 16 September 1975 may be registered in the British high commission register there.
It is not possible to extend that provision to Nauru or Western Samoa, since the United Kingdom has no resident high commission in either country.
The Bill now before the House contains, as I have said, amendments to, and repeals of, United Kingdom legislation. The Bill does not purport to modify the laws of Papua New Guinea, Western Samoa or Nauru.
I turn now to the individual clauses. Clause 1 adds Papua New Guinea, Western Samoa and Nauru to the list of Commonwealth countries in the British Nationality Act. As a result, it confers the status of British subject and Commonwealth citizens on the citizens of the three countries.
Clause 2 enables births and deaths that have occurred in Papua New Guinea since her independence on 16 September 1975 to be entered in the appropriate registers of the British high commission in Port Moresby.
Clause 3 and the schedule provide for a variety of modifications to certain United Kingdom enactments, all of which are consequential on the attainment of independence and entry into the Commonwealth of Papua New Guinea, Western Samoa and Nauru. The modifications are on the standard lines when a territory becomes independent and joins the Commonwealth.
Clause 4 gives the short title of the Bill.
The Bill is a consequential measure and is long overdue. The reasons for the delay are that very few people have been affected, and those not seriously, and there has been a lack of opportunity to fit it into the parliamentary timetable.
These consequential modifications will place the three countries on the same footing as other Commonwealth members in our law. They raise no new questions of principle, and clearly should not be delayed any further. I hope therefore that the House will support the Bill.

Mr. Edward Rowlands: I must be one of the few hon. Members who have had the privilege of visiting Papua New Guinea and Nauru, Alas, I have not been to Western Samoa. I was the former Government's representative at the 1975 independence celebrations in Papua New Guinea, and I went to the remarkable mini-State of Nauru, which conducts its own foreign policy and international affairs. I wish that other mini-States would follow that pattern. Nauru has not set up shop all over the world but has followed the principles and qualities of a mini-State and continued to enjoy life in its own community.
We have been slow to amend our legislation to conform with actions that occurred in 1968, 1969 and 1975. However, I am not qualified to criticise that, because I was partly responsible for four years of that delay. It was never brought to my attention that such inadequacies existed. I assume that the delay has not harmed anyone or damaged anybody's position while entering and leaving the United Kingdom. I trust that no one has been wandering around as a stateless person because the Government had not amended the legislation following independence. I hope that the Minister will confirm that later.
I understand that we cannot make the Bill retroactive, but what would it mean in practical terms if we did so? Few hon. Members would quarrel with retrospection if it had any material effect. I imagine that no problems have arisen, otherwise there would be a greater sense of urgency about the Bill.
There are references in the Bill to "British subject" and "Commonwealth citizen". They are part of the kaleidoscope of references and definitions within the concept of nationality and were the subject of the tortuous discussions that led to the Green Paper on nationality law. Will the Minister tell us what effect that paper will have on the terminology used

in the Bill? If the Government brought in proposals concerning British nationality law, would another Bill be needed to amend the definitions now used?
In view of the lengthy delays in bringing our legislation up to date, I do not think that hon. Members should delay the progress of the Bill further.

Mr. Tam Dalyell: Ministers from the Treasury and the Home Office and my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) who perhaps knew me in a previous incarnation can heave a sigh of relief, because I shall not detain the House for long on the affairs of Papua New Guinea. I seldom open my mouth to speak on foreign affairs, especially in relation to places that I have not visited. However, the Back Bench foreign affairs committee of the Labour Party asked certain questions that are legitimate.
In The Daily Telegraph of 20 September there appeared under the headline "Four Judges Quit in Papua Clash With Minister" an exaggerated account of the problems of the Minister, Mrs. Nahau Rooney, who was jailed for contempt when she criticised a court decision. The newspaper said that she criticised the court decision on a deportation issue and asked the judges to show more discretion in their decisions. The article said that she had interfered in the sole prerogative of the Government. Apparently prisoners all over the country rioted and escaped, proclaiming that if the Government could manipulate the law to free one of their Ministers they also deserved to be free.

Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. I hope the hon. Gentleman will relate his speech to the terms of the Bill.

Mr. Dalyell: I was about to say that I do not want to go into the details of the matter, but clearly law and order in Papua New Guinea, outlined in an amusing article by Martin Woollacott in The Guardian of 19 September under the heading "From golf club to the battle-axe", relate to the Bill. We are entitled to ask whether there is a system of law and order in Papua New Guinea.

Mr. Deputy Speaker: Order. That is completely out of order. The Bill relates to nationality, births and deaths.

Mr. Dalyell: I ask whether the press reports in relation to Samoa under the heading "Shades of Nixon" are relevant. My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) has been to Nauru. There have been articles about the difficulties experienced in Nauru, particularly financial difficulties concerning Air Nauru. Will the Minister comment on the current problems as they affect the legislation before us?

Mr. Blaker: I, too, am familiar with Nauru. I enjoyed a brief stay there, but if I ventured into the territory that the hon. Member for West Lothian (Mr. Dalyell) has invited me to explore I should be straying out of order.
I should also be straying beyond the limits that I ought to observe if I went into the questions that the hon. Gentleman raised about Papua New Guinea. They are not relevant to the granting to citizens of Papua New Guinea of the status of Commonwealth citizens under United Kingdom law or to the question of registration of the children of citizens of the United Kingdom and colonies who live in that territory. Those are the sort of matters that the Bill is designed to deal with.
I shall attempt to answer the questions posed by the hon. Member for Merthyr Tydfil (Mr. Rowlands). He asked whether problems such as statelessness had arisen. We are not aware of any problems in practice. The sort of consequence that has occurred has been that the children of citizens of the United Kingdom and colonies who have been born in Papua New Guinea since its independence in 1975 have not been able to be registered on the proper register.
There are about 150 such childern. Obviously, they are not very old because Papua New Guinea has not long been an independent State. Any problems could have been dealt with by administrative action if necessary. Perhaps that is one reason why the Bill has not been brought forward before.
On the question of retrospection, I am not aware of any disadvantage that

would accrue to anyone as a result of the Bill's provisions. If we were to make the provisions retrospective in the respect to which I referred, there could be disadvantages to individuals. For example, some people may have been admitted to this country under the Aliens Act, because these territories were not regarded under United Kingdom law as Commonwealth countries. That is the only way in which those people could have got into this country, and if they were to be treated retrospectively as Commonwealth citizens their admission under the Aliens Act could be regarded as having been invalid.
On the question of nomenclature in connection with the Green Paper on nationality law, the Bill does not deal with matters that would be central to any legislation that may be produced on that subject. If there is any change in the description of citizens on the lines that the hon. Member for Merthyr Tydfil suggested, it would presumably be a general change affecting many countries and would apply to other countries as well as the three with which we are concerned.
The Government felt that if we delayed the Bill further it must lose its place in the queue again. We have an opportunity to get it through, and I am sure that we are right to proceed.
The Bill must be one of the least contentious measures of recent times and is probably a good deal less contentious than some Bills that we shall be considering shortly. The three territories are good friends of Great Britain and valued members of the Commonwealth. It is right that the House should ensure by the passage of the Bill that the few remaining provisions in our legislation necessary to acknowledge that status are put into force.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Mather.]

Committee tomorrow.

Orders of the Day — ISLE OF MAN BILL

Order for Second Reading read.

The Minister of State, Home Office (Mr. Leon Brittan): I beg to move, That the Bill be now read a Second time.
This short Bill marks a further significant development in the long history of co-operation between the Governments of the United Kingdom and the Isle of Man in customs and excise matters. I am particularly glad to be associated with it.
The Bill offers a rare opportunity for the House to have regard to the special position of the island and the aspirations of its people and to appreciate the importance of the long-standing and close association between the United Kingdom and the island, and the benefits to both our territories of continuing our close co-operation on matters of common interest.
The present development in customs and excise matters is the second event of some moment in the history of the Isle of Man this year. During 1979 the island has celebrated the millennium of the Tynwald, the island legislature. My right hon. Friend the Home Secretary had the duty of accompanying the Queen when she visited the island on Tynwald Day, 5 July. Subsequently, on 15 October, my right hon. Friend signed on behalf of the United Kingdom Government the new agreement between our two Governments on customs and excise and associated matters.
The agreement, which has been laid before the House, sets out the conditions agreed between the United Kingdom Government and the Isle of Man Government on which the island's wish to run its own customs and excise service has been met.
The British Government well understand the desire of the people of the Isle of Man to run their own customs and excise service. We feel that the negotiations to this end that have taken place over recent months between the two Administrations have resulted in an agreement that can justifiably be regarded as satisfactory to both parties.
The agreement commits both Governments to introduce any necessary legislation

so that the island's customs and excise service may operate from 1 April 1980. The Bill before us contains the enactments that the United Kingdom Government consider to be necessary in the United Kingdom as a result of the island assuming responsibility for its own customs and excise administration.
The measure will bring to an end more than 200 years' presence of the United Kingdom customs officers on the island. The presence began in 1765 in very different circumstances, largely as a result of the need to counter the growth of smuggling between the two territories.
The essential features of the customs and excise arrangements that have developed over the intervening years, and exist today, largely date back to the nineteenth century and were formalised in 1957 in an agreement between the two Governments, which was followed by the passing of the Isle of Man Act 1958.
The present Bill seeks, as far as possible, not to disturb those arrangements and proposes to maintain the essential features of the 1958 Act and, in particular, to retain the advantages to both Governments of a customs union between our two territories and the arrangements for the sharing of customs and excise revenue.
There will, broadly, continue to be common customs and excise duties, common VAT and car tax rates and common import and export prohibitions and restrictions on, for example, drugs. Under the proposed arrangements, there will continue to be no need for a customs barrier between the United Kingdom and the Isle of Man and there will continue to be free movement of goods and travellers between the two territories.
The Bill provides for the introduction of new financial and accounting arrangements consistent with the agreement and for measures safeguarding United Kingdom revenue after the new arrangements come into operation, when the customs and excise service of the Isle of Man, instead of that of the United Kingdom, will collect customs and excise duties and taxes on the island. Accordingly, the Bill also provides for the recovery from the United Kingdom of customs and excise duties and taxes chargeable on the island and for the enforcement of Isle of Man judgments relating to duties. It


supplements existing procedures for serving summonses and warrants in revenue proceedings.
In order to implement the handover, the Bill enables the functions of the Commissioners of Her Majesty's Customs and Excise on the island to be transferred to officials of the island Government.
The opportunity has also been taken in clause 11 of the Bill to enable the transfer to the Manx, by Order in Council, of functions conferred on the Lieutenant Governor under United Kingdom legislation. The present century has seen successive transfers of powers of the Lieutenant Governor to the hands of democratically elected representatives of the Manx people.
The provision in the Bill would enable the Isle of Man to continue this programme of transferring, with the agreement of Her Majesty's Government, certain of the remaining functions of the Lieutenant Governor to appropriate bodies of the island Government. The primary purpose of the Bill is to prepare the way for the changes that I have mentioned in the administration of customs and excise measurements. These changes call for the enactment of parallel Isle of Man legislation which, I understand, is already under way and will, I feel sure, be implemented in the same atmosphere of good will, and with the same spirit of co-operation, as has been evident during the past months of negotiations on the subject between our two Administrations.
I commend the Bill to the House as a measure introducing a change in the relationship between our two communities which merits the support of the people of the United Kingdom and will, I am confident, be equally welcome to the people of the Isle of Man.

Mr. George Cunningham: We, the Opposition, join the Minister of State in recollecting the congratulations which we have extended before to the Isle of Man on its millennium year.
As the Minister said, it is not often that the House has occasion to debate the affairs of the Isle of Man and the relationship—the rather curious constitutional relationship—which subsists between the Isle of Man and the United Kingdom.

Certainly, it is an odd relationship, full of anomalies, but it is one which in modern times has been acceptable to the peoples of the island and of the mainland and one which has caused remarkably little friction over the years. When we are considering any change in the relationship, and to some extent this Bill represents change, we must be careful to avoid doing anything which might create sources of friction in the future.
The purpose of the Bill, as the Minister said, is to permit the Isle of Man—or to reflect its decision—to maintain its customs service and to make the necessary changes in United Kingdom legislation. The Bill, if passed, will give effect to an agreement reached between the Governments of the Isle of Man and the United Kingdom on 15 October and published on Tuesday of last week.
The Opposition have already expressed disapproval of the delay in getting the text of that agreement into the hands of Members. Three weeks or so between the conclusion of an agreement and the publication of the text is not abnormal and is not worthy of criticism in the normal way of things. What is, however, both abnormal and unacceptable, and I hope that the Minister will take this on board, is that the House should be asked to consider a Bill to implement an agreement on a Thursday when the text of the agreement has been made available only on the previous Tuesday. By accident, because last Thursday's business was postponed to Monday of this week and to today, that interval has become nine days instead of two, but it was intended that we should debate the Bill two days after the agreement had been made available to Members. That is not good enough, and I hope that nothing like that will happen again.
I hope that the Minister will give me his attention. Where it is not possible for such an agreement to be printed and published as a Command Paper—and there can be delays in that process—it must be recollected that typewriters were invented a long time ago, and there is an obligation on the Government and the Home Office to make sure that the text in one form or another gets to Members as quickly as possible when a Bill is due in which the first paragraph of the explanatory memorandum refers to the agreement. I wish the Minister to take on board our


view of the negligence of the Home Office in getting that text to Members, and I hope that that never happens again.
Before coming to the substance of the proposals in the agreement and the Bill, I wish to register a small concern about the language of the agreement in certain places. Paragraph 14—to take just one example—says:
The governments also agree to the following particular arrangement (including any necessary legislation)".
Similar wording is used in some other paragraphs.
The Government of the United Kingdom are, of course, free to give undertakings that they will propose or introduce legislation to Parliament. But the wording of agreements should never remotely imply that the passage of that legislation by Parliament can be taken for granted. No undertakings about the passage of legislation have any validity, and I hope that a different form of words will be adopted in future to make that clear. It is noticeable that the language of the October 1979 agreement in this regard is different from the sort of language used in the previous agreement a decade or more ago.
The Isle of Man already has the right to determine its own customs charges and duties, just as it is free to determine the level of income tax rates on the island. When we say that, however, it is as well to add for the avoidance of doubt in anyone's mind that the exercise of this right is subject to the approval of Ministers in tendering advice on the assent and to the overriding and paramount right of this Parliament to do all things necessary both for the purpose of adhering to international agreements entered into on behalf of the Isle of Man, with or without its consent, and, more generally, for ensuring the good government of the island. 'The habit is—and it is a good habit which we should stick to as far as possible—that this Parliament does not in fact legislate for the Isle of Man except on a restricted kind of matter. But, in law, that habit is not binding, and we should make that clear.
The Crowther Commission on the constitution did us all a service by going into this matter in some detail and it is worth quoting the passage in which the Commission set out the situation. The Commission said:

Parliament has a paramount power to legislate for the islands—the Isle of Man and the Channel Islands—in any circumstances … if exceptionally circumstances should demand the application to the islands without their consent of measures of a kind hitherto regarded as domestic then Parliament would in our view have the power to enact the necessary legislation.
While that fact should not be forgotten, surely it is right that relations between the Isle of Man and ourselves should proceed according to the conventions, the principles of give and take and mutual trust and support which are the basis of the friendly relations that have up to now existed. It is in that context that we come to the proposal before us.
As I understand the situation, there is nothing in either the agreement or the Bill which in any way alters the rights of the two Governments and the two legislatures concerning the fixing of customs and other duties and charges. Nor is there anything here which changes the conformity which in practice exists between the rates of duty actually currently being charged. There can be a divergence in roles applied—and in a few cases such as beer there are divergences now—but the Bill makes no change in the legal right to create such divergences. I hope the Minister can confirm that that is the case.
The Bill does two things. First, it makes the necessary changes in United Kingdom legislation to take account of the setting up of a separate Isle of Man customs service as agreed by both Governments in the agreement. The principal legislation about that service will, I assume, be in an Act of Tynwald—an Act which will, of course, require the assent of United Kingdom Ministers.
Secondly, the formula for dividing the proceeds of customs duties—and here I would like some clarification from the Minister when he replies to the debate—between the United Kingdom and the Isle of Man as set out in section 2 of the 1958 Act is altered in clause 2 of the Bill. I should be interested to know whether there will be any alteration in the financial distribution of funds as a result of that. When we come to Committee and we reach clause 2, I hope that we can consider the point that I have raised.
That brings me to the business of the dangers to good government and so to the relations between the two territories if the Isle of Man should ever become


more of a tax haven than it is now. This is an important matter which cannot be shirked. If things go wrong, this issue could poison relations between the island authorities and the United Kingdom. It would not be acceptable to us for the Isle of Man to become a means of avoiding tax and other obligations which are, in commonsense terms, properly due.
If there is any body of opinion in the island that would like to see things go that way, we should make it clear now that the overriding powers of this Parliament would have to be employed to prevent it. Of course, to some extent the Isle of Man is a tax haven now. Taxation is, by custom, regarded as a matter for Tynwald, not this House, to decide. It is not present practice, but any significant expansion of the opportunity for abuse there would be unacceptable. As the Crowther report said in addressing itself exactly to this point,
Implicit in the situation is the opportunity for abuse; but the United Kingdom taxation authorities have ample statutory powers to deal with that abuse
I simply question whether, in the light of some of the evidence presented to the Tynwald Select Committee—which I shall come to in a moment—that optimistic, confident and definite statement by Crowther way back in 1973 is still unchallengeable. We must make sure that it is clearly understood by the few people whose minds might turn in that direction that we would not tolerate a Cayman Islands in the Irish Sea.
The agreement reached on 15 October does not seem to open up that prospect at all—quite the reverse. Assurances about conformity of rates and about consultation on rates are set out in the agreement. The agreement seems to reflect that give and take which has to characterise relations if they are to continue amicably.
Anyone reading only the Bill and the one document that the Government have chosen to present to the House in connection with it might think that there was no cloud in the future relationship between the island and the United Kingdom. In fact, there is much more background to the proposals before the House than the Government have chosen to publish and, I must add, more than the Minister has chosen to refer to in his opening speech.
The essential documents are the review of the Common Purse Agreement, conducted at the invitation of the Isle of Man Government by PA Management Consultants Limited, and the proceedings of the Select Committee of Tynwald in pursuance of that review. The fact is that there are financial interests operating in the Isle of Man, or which have their eyes on the Isle of Man, which would like to see the island become a tax haven, an offshore bolthole, where they can be free of normal surveillance. This is a far more serious matter than the possibility that tourists to the island will get their whisky and cigarettes a bit cheaper.
The PA report held out a prospect of the island gaining considerably in its financial sector from an abrogation of the Common Purse Agreement with the United Kingdom. It candidly admitted that there would be compensating losses in some other ways. I find the most revealing passage in the PA report that on page 23, where it says that
no financial centre can in the longer term afford to have any financial records of its banking and insurance institutions supervised by agents of a foreign Government".
That is the language of a private consultancy, not of the Isle of Man authorities, but it should be said at once that, if the authorities and people of the Isle of Man were to start thinking of the relationship between them and the United Kingdom on that basis, it could not be a one-way business. The relationship has to be based on give and take, and not just on take. If the Isle of Man authorities decide to further their own interests without regard to those of their fellow countrymen on the mainland, there will be a resentment and reaction on the mainland that will be likely to render the equations set out in the PA report invalid.
There is little coverage of Isle of Man affairs in British newspapers and, of course, the Isle of Man is hardly mentioned in this Parliament because it is not represented here. I hope that the new Select Committee of the House on Home Office affairs will direct its attention sometimes to Isle of Man matters. The absence of coverage in the press and in this House means that hon. Members are not aware of the intense debate that has been going on on the island about its future as a financial centre. It is necessary to correct that, and the best way of


doing it is to quote some of the submissions made to the Tynwald Select Committee by financial interests and those connected with them on the island. It is a pity that the report of the Select Committee has not been printed and published, for some of the ideas canvassed before the Committee will surprise those who assume that the future of our relationship with the Isle of Man will be free of problems.
For that purpose I should like to quote some of the submissions that were made to the Tynwald Committee. One submission said:
Our particular aim is to build up an international business in providing investment advisory services etc. to those resident outside the United Kingdom and the Isle of Man. Clients who come to us for such advice have the alternative of choosing banks in other areas such as Switzerland Luxembourg Monaco and certain West Indian islands. … They specifically object to a situation in which not only do VAT returns have to be made to the United Kingdom but the Customs and Excise officials employed by the United Kingdom could make complete inquiries into the affairs of any business operating in the Islands".
I am sure that in winding up the debate the Minister will take the opportunity to rebut that assertion, but for the moment I am merely quoting some submissions to give the flavour of the discussion that has taken place.
Another submission said:
There is a continuing worldwide demand for sterling. … Much of this sterling is in foreign ownership and foreigners are at the present time unwilling as a generality to hold sterling in the United Kingdom itself. As a consequence a great deal of these funds go to the offshore islands and in particular to Jersey. In practice it will probably be politic to get rid of the Common Purse in stages and it is suggested that the first step would be to rechristen it with the title 'Customs Union' or something similar and opt out of VAT. … Without the Common Purse the Island would be seen to be independent and thus able to look to North America and the EEC countries as well as the United Kingdom as a suitable home for subsidiary enterprises of all kinds.
Another submission said:
It is in my view vital that every possible step shall be taken to ensure that foreigners do in fact believe that full confidentiality exists in the Isle of Man as they believe it to do in the Channel Islands and that all thoughts of surveillance by a 'big brother' in the United Kingdom are eliminated. … From the angle of the financial sector the ideal would undoubtedly be complete fiscal autonomy from the United Kingdom. … On balance it would

seem to me to be too great a risk to go the whole hog' at once.
Another submission said:
The power of another nation
—another nation!—
to control wholly or partly the rates of one or more taxes levied is seen abroad as evidence of a degree of dependence on that other nation whether or not such power arises by agreement.
The submission added:
A matter causing concern is the right of the United Kingdom Customs and Excise officers to examine the books of the Bank in regard to the collection of VAT".
This submission was put forward by a bank.
If this tax is to continue we would like to see the Island having its own Customs service. … Ideally we feel no fiscal information in regard to Manx businesses should leave the Island but we do realise that this is practically impossible to arrange while the agreement is in force".
One wonders what Singer and Friedlander (Isle of Man) Limited, which wrote that passage for the benefit of Tynwald, feels that it has to hide. We must bear that kind of comment in mind in assuming the continuing truth today of the comment in the Crowther report to which I referred earlier, which said:
Implicit in the situation is the opportunity for abuse; but the United Kingdom taxation authorities have ample statutory powers to deal with that abuse".
This is another example of the kind of submission made to the Tynwald Select Committee:
I am aware that certain banking services, already available, would be utilised by companies outside the sterling area if they were assured that there was no requirement to make returns of any nature to United Kingdom tax authorities".
Mr. Gilbey made the following comment:
The Island should be in a position to decide on and impose its own rates of indirect taxation without regard to those in, or the interests of, the United Kingdom or any other country … Tynwald should negotiate to end the Common Purse Agreement. Such negotiations will require a very high degree of statesmanship and also good political timing, perhaps when a Conservative Government is in power in the United Kingdom.
I have quoted those submissions to give something of the background, which we would not have gathered from any of the documents presented by the Minister to the House or from his opening speech. There is more to this than meets the eye.


I say that not in criticism of the Isle of Man authorities but in criticism, perhaps, of those who are using—and see the prospect of using—the Isle of Man for their personal profit. So much for the views of those speaking for the financial sector in the Isle of Man.
One can contrast warnings given by people on the other side. One submission stated:
We are dealing with a minority, however, who would use abrogation of the Common Purse as a first step in an effort to break away from our reciprocal agreements with national health and pension schemes. Beware of the financier bearing gifts.
Another said:
Those engaged in this sector"—
that is, finances—
are seeking further economic protection in the first instance for personal gain … and at the same time seeking an advantage not available to those engaged in the other sectors of the economy. … Under the present agreement the stability of the Island's Government is apparent. It might not always remain that way if it were felt by some that all the financial advantages of independence were accruing in the main to one sector only of the economy.
Another said:
The levying and collection of customs by Isle of Man authorities presented problems which led to the first Common Purse Arrangement. Would history repeat itself is a question which must come to the fore, and accordingly I hope that in their approach to the renegotiation of the Common Purse Arrangement too much reliance is not placed on the conclusions of the PA Management Committee Report.
The Isle of Man Trades Council said:
We feel the whole report of the PA Consultants which recommended abrogation of the agreements is slanted towards benefit for the banking and financial sector to the detriment of the majority of the population, especially the lower and fixed income groups".
I found the most moving submission was that by a Manxman who had considerable experience in the United Kingdom and islands customs service. He wrote:
I regard myself as a patriotic Manxman seeking only to serve the best interests of the Island. I sympathise with and support the desire of Tynwald to have greater control over insular affairs. History, geography and culture all make the Manx case for devolution greater than the cases now being argued for devolution for Scotland and Wales. But surely the key to responsible self-government is not to be found in alcohol and tobacco. Though I like a drink and a smoke I feel very strongly that the image of an Island which seeks to

promote itself on gambling, drinking and smoking is false. The Island is worth more than that. In any case, haven't we been here before, in the years before 1765?
It is equally unworthy to base the prosperity of the island on attracting banks and finance companies trying to evade legitimate surveillance and taxation to which they are, and should be, subject in the large countries where otherwise they are based.
The Opposition are content to see the Bill receive its Second Reading and go through its other stages tonight. Nothing in the Bill or in the agreement gives the financial interests reflected in some of those quotations the substance of what they want.
But we have to sound a warning. It is in the end the responsibility of this Parliament to look to the well-being of the entirety of the United Kingdom and the islands. We cannot abdicate that responsibility. We should say to the people of the Isle of Man, as was said in one of those submissions "Beware of the financiers bearing gifts". Their interests are not in the well-being of the island but the health of their balance sheets and escape from the taxman. If a tiny island like the Isle of Man lets the financiers get a grip, it will soon discover that it is the banks that are running the Isle of Man, not Tynwald.
Maybe it is time for parliamentarians in this Parliament and parliamentarians in Tynwald to have some means of meeting informally. There is at the moment no means whereby parliamentarians of these two so much interrelated and interdependent legislatures can find a way of coming together. If that notion found favour with Tynwald, I am sure that both sides of this House would like to see some means established whereby we could have better contact between parliamentarians of the two legislatures than perhaps we have had in the past.

Mr. Tam Dalyell: We all owe a considerable debt to my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham).
This story started for some of us, Mr. Deputy Speaker, precisely during the debate on devolution. My hon. Friend may well remember that from time to time it was said that devolution would


provide some of the advantages enjoyed by the Isle of Man. Only this morning, on BBC radio, there was an account of some financial negotiations in New York undertaken by a certain Mr. Robert Sangster, an Isle of Man financier. One begins to wonder why Isle of Man financiers should start negotiating in the United States. It must be for some purpose.
I suggest that this may be the tip of an iceberg and that there are very serious issues involved. I do not wish to regurgitate what my hon. Friend has said so splendidly, but let no one be under any misunderstanding. This is a subject of considerable interest.

The Minister of State, Treasury (Mr. Peter Rees): We have had a short but none the less interesting debate, as one would expect when my hon. and learned Friend the Minister of State, Home Office, the hon. Member for Islington, South and Finsbury (Mr. Cunningham) and the hon. Member for West Lothian (Mr. Dalyell) have made contributions. Indeed, there has been a certain nostalgia attaching to some of the comments, particularly those from the Opposition Benches. One recalls battles long ago, which turned out—at least from the point of view of hon. Members present here tonight—in the way that we all wanted on that occasion.
I hope that the House will forgive me if I do not go over-deeply into the constitutional implications, because we are not here being asked to legislate to change the constitutional framework within which the United Kingdom's relations and this House's relations with the Isle of Man are conducted.
If I may say so, I admired the thorough way in which the hon. Member for Islington, South and Finsbury analysed and set out the details of the constitutional relationship. I hope that he will allow me to add just one gloss, for the benefit of those in the House who have not perhaps applied themselves to the issue with quite his thoroughness. The Isle of Man is a Crown dependency. Long ago, the particular framework within which we operate was set up legislatively by this House. It has long been a convention that we do not legislate in the internal affairs of the Isle of Man. There may be

occasions—I hope there never will be—when we shall have to consider such a fundamental question, but I should like to think that we have established a stable and pleasant relationship that will, as far as we can see, meet all the changing circumstances that we are likely to encounter.

Mr. Dalyell: That stable and pleasant relationship, as the Minister calls it, will not remain stable and pleasant if certain people in the Isle of Man, to borrow the phrase used by my hon. Friend the Member for Islington South and Finsbury (Mr. Cunningham), decide to turn it into some kind of Cayman Islands. The question that we are entitled to ask is surely this. Are there certain people on the Isle of Man who are altering this relationship, which hitherto has been pleasant and stable enough and of no great consequence? If the Isle of Man is to become some kind of sheltered banking area, we have a new ball game, and it becomes a matter for discussion in this House.

Mr. Rees: This was a point touched on by the hon. Member for Islington, South and Finsbury. I emphasise to the House that nothing that could be construed in or out of this measure would open the door to that kind of future. I reassure the House on that. This measure is concerned purely with indirect taxation. All that this measure does, as my hon. and learned Friend emphasised, is to permit the Isle of Man to set up its own customs service to operate with the United Kingdom's Customs and Excise service. It is—and I hope this is not too emotive—a customs union. I might go so far as to say it is a common market.
Naturally, one suspects the motives that have led some finance houses, and individuals, to set up their headquarters and conduct their operations from the Isle of Man. However, I am not sure that I would be in order if I discussed that dimension of the problem, because it does not arise in the Bill.
The hon. Member for Islington, South and Finsbury raised a point to which I should like to respond. In clause 6 of the—not precisely but broadly and in principle—a clause in an earlier agreement in 1958. In doing so it has bound itself to harmonising its rates of indirect taxation, with the exception of some small


areas. Beer duty has always been lower on the Isle of Man. I understand that the island has two domestic breweries, and the rate of duty may be concerned with that. But I do not think that the House will worry unduly about it. Nor do I believe that we are concerned about the Isle of Man's gaming duties, which do not spill over on to this side of the Irish Sea. The island operates its own casinos, and so on, and there is no need to harmonise that aspect.
The Isle of Man has agreed to maintain the same rates and coverage of VAT, excise duties and customs duties as we do. It goes no further than that. What will be new as a result of this agreement—if the House passes the Bill, as I hope it will, and if a parallel Bill is passed by the Tynwald—is that there will now be a small independent customs and excise force on the Isle of Man.
I understand that to a large extent the staff will be recruited from members of the present Customs and Excise service on the Isle of Man and that they will work closely with our own Customs and Excise. Indeed, I hope they will look to us for consultation, advice and training. But constitutionally they will have their own separate Customs and Excise force.
The hon. Members for Islington, South and Finsbury and for West Lothian were both a little concerned about whether the Isle of Man would move on and make itself a tax haven—a Luxembourg or Lichtenstein in the Irish Sea. Tonight, we are not concerned with that. There is nothing in the Bill, as it stands, that should lead anyone to conclude that there will be greater scope to avoid direct taxation. The Bill is entirely concerned with the administration of indirect taxes in the "common market" formed by the Isle of Man and the United Kingdom.

Mr. Dalyell: If it is not suitable to discuss these questions tonight, when will it be suitable? There is great difficulty in discussing this kind of issue when one has—dare I say it?—some kind of a devolved government. Did we not find all these difficulties before the recent events in Ulster and when we were discussing Northern Ireland? It seems to me that the House of Commons has a problem.

Mr. Rees: Of course I am sensitive to the anxieties expressed by the hon. Member. I have had occasion to admire his contributions to our constitutional debates over many years. However, I respectfully suggest that if he feels it appropriate to debate the whole of our constitutional relationship with the Isle of Man, he should find other opportunities to put down some kind of substantive motion. That kind of issue does not really arise on this Bill.
I would like to reassure the hon. Gentleman, but it does not lie within my narrow field of responsibility to deal with this point—

Mr. George Cunningham: I quite agree that this Bill does nothing to bring about a Cayman Islands situation or anything like it. However, I hope that the Minister will not ignore the facts. Reading through the PA Management Consultants' report and the Select Committee report on proceedings in the Tynwald, I find that many people see this change as a first cautious step in the direction mentioned by my hon. Friend the Member for West Lothian (Mr. Dalyell). The authorities on the Isle of Man are infinitely more cautious and sensible, but let us not brush aside the dangers.

Mr. Rees: I took very careful note of the comments of the hon. Member for Islington, South and Finsbury. I am sure that they will be noted, read and commented upon outside this House, and perhaps even on the Isle of Man. He drew attention to the management consultants report which I have read—although I cannot match the hon. Member's assiduity in studying it—and I did not feel that it was appropriate for us to lay it in the Library of the House of Commons. I regard it as extraneous matter, and it is open to hon. Members to study it at their leisure if they so wish.
I have also studied the contributions to the debates in the Tynwald, but it is not appropriate for me to involve myself in internal debates on the Isle of Man. It would be inappropriate for any Minister, however humble, of a United Kingdom Government to comment in detail on interventions made in the legislature of a friendly State. I know that the Isle of Man is a Crown dependency and at the end of the day we have ultimate legislative responsibility for it, but we do not


want to conduct our debates on this narrow issue in that way.
I am quite happy to debate this further on an appropriate occasion but it would be quite inappropriate for me to go further now.

Mr. Dalyell: I make it plain as one who has been to conferences at Douglas and who has visited the Isle of Man frequently that I have nothing against the good-hearted Manx people. Also, I agree that it would be an abuse of this occasion to pursue this matter too closely. However, I warn that my interest has been alerted and aroused by events over the past few weeks and that some of us may wish to pursue this matter in all the available ways. We would like to ascertain why Mr. Robert Sangster and others like him should go to the United States and emphasise that they are Isle of Man-based financiers. They would not do this unless there was some serious advantage in doing so. That advantage may be a disadvantage to the British community and the rest of the islands. There are balances to be considered. What is one man's advantage in this context is surely another man's disadvantage. The disadvantage is to the citizens of the rest of the United Kingdom. We come up against the problem of having subordinate Parliaments in only parts of the United Kingdom.

Mr. Deputy Speaker: Order. I am sure that the hon. Member for West Lothian (Mr. Dalyell) knows that the topic that he seeks to introduce is not covered by this debate. It would be interesting to hear the Minister's answer, but the hon, and learned Gentleman would be out of order in trying to answer the question.

Mr. Dalyell: My final contribution is that our interest is now thoroughly aroused in the subject and we shall pursue it in every way possible.

Mr. Rees: I take note of the hon. Gentleman's interest. I must defer to the Chair, as I hope I always do, and not pursue interesting byways. There may be another opportunity when the hon. Gentleman will be able to pursue the interesting matters that he seeks to introduce.
I do not claim that the Bill is a simple measure. Some of its provisions are rather abstruse. It is the successor to the Isle of Man Act 1958. It is designed to allow a joint administration of the indirect taxes of this common market, this customs union, and to enable it to function effectively and properly with two bodies of Customs and Excise officers.
The Bill has no deeper, no wider and no further purpose than that. We could have a fascinating debate on many other matters were we within the rules of order. I am tempted to take up the remarks of the hon. Member for Islington, South and Finsbury, who read a letter summing up the views of one perceptive observer. I know exactly who the letter was from. It happened to be written by one of my constituents, Mr. Douglas Crellin, who lived on the Isle of Man, served with the Customs and Excise and died a few years ago. I, too, spotted that letter. I thought how perceptively it was written.
We need not debate the constitutional relationship of the House of Commons to the Tynwald. There is involved the status of Crown dependency. It is not incumbent upon me to speculate on Mr. Sangster's motives or what could or could not be done by way of direct taxation there or here. I am sure that the hon. Member for West Lothian, with his well-known parliamentary skills, will be able to create an opportunity for such a debate within the rules of order.
The Bill is a practical measure that is designed to implement an agreement that has been worked out with good will and care between the two authorities of this country and the Isle of Man. I commend it to the House. I hope that it will find favour on both sides of the House and will pass through the House without more ado.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. MacGregor.]

Bill immediately considered in Committee.

[Mr. RICHARD CRAWSHAW in the Chair]

Clause 1 ordered to stand part of the Bill.

Clause 2

ISLE OF MAN SHARE OF COMMEN DUTIES

Question proposed, That the clause stand part of the Bill.

Mr. George Cunningham: I wonder whether I may take this opportunity to ask the Minister to give us some indication of whether there will be any difference in the allocation of funds as a result of clause 2, as it is here set down, compared with the provision which previously existed.

Mr. Peter Rees: I am happy to assure the Committee that there will be no difference. If the Committee wishes, I can explain the precise basis on which the various duties have been allocated and will be allocated. However, if the Committee is content with my assurance, I merely say "No, there will be no change".

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Clauses 3 to 5 ordered to stand part of the Bill.

Clause 6

VALUE ADDED TAX

Question proposed, That the clause stand part of the Bill.

Mr. George Cunningham: The clause relates to VAT, and it would be useful if the Minister could give us the latest information that he has about the intentions of the Isle of Man Government with regard to the future of value added tax on the island. The matter featured greatly in discussions in the Isle of Man, and it is of great interest to people in the United Kingdom whether there is to be a different regime in the Isle of Man.

Mr. Peter Rees: In clause 6 of the agreement which was signed in October, the Isle of Man undertook to keep the rates and coverage of the taxes in harmony with the remainder of the United Kingdom. The agreement can be terminated by new notice, but there is no

evidence that the Isle of Man intends to terminate it. Short of termination, VAT will remain with the same coverage and the same rates.

Mr. Dalyell: On the question of VAT, what is the financial relationship between the Isle of Man and the European Community? Docs the Isle of Man accept the European Community spending?

Mr. Rees: That is perhaps rather more a matter for the Home Office. The Isle of Man acceded to the European Community under the third protocol to the Treaty, and in matters such as fiscal harmonisation the Isle of Man is a proper member of the Community.

Question put and agreed to.

Clause 6 ordered to stand part of the Bill.

Clauses 7 and 8 ordered to stand part of the Bill.

Clause 9

REMOVAL OF GOODS FROM UNITED KINGDOM TO ISLE OF MAN

Mr. Brittan: I beg to move amendment No. 1, in page 10, line 30, leave out from first "of" to end of line 31 and insert "£200".
It is a technical amendment to make the maximum penalties imposable for breaches of the procedures described in clause 9(4) consistent with the four-point scale of summary fines of £50, £200, £500 and £1,000 introduced by the Criminal Law Act 1977.
That Act had the objective of establishing a more rational penalty structure as regards summary penalties. It is therefore right that whenever practicable we ensure that the penalties inserted in legislation subsequent to the Act conform to the new scale. As originally drafted, they did not.
A maximum penalty of £200 is generally regarded as adequate for what are really breaches of procedure. For more serious offences, it is not a maximum and such offences may be prosecuted under the wider powers available to the Customs and Excise authorities.

Mr. George Cunningham: The amendment affords the opportunity to ask the Minister where matters stand with regard to Tynwald legislation. When I saw the amendment, I wondered whether it was


being moved because an amendment had been carried to the Tynwald legislation on the same point. I gather from what the Minister said that that is not so and is not the origin of the Government's amendment.
Has the Tynwald legislation been introduced or passed? If the Minister needs time to answer, I am happy to relax for the moment. It would be useful to know whether the Tynwald legislation has been introduced. It is not easy for a Member of the House to find out a great deal about what happens in the Isle of Man.
A few moments ago the Minister of State, Treasury said that the Government have decided not to lay the PA report in the Library of the House. However, the report is there and I do not object to that. I believe that he said that it was not necessary or desirable for it to be laid there. Nevertheless, it would be useful to have a means of keeping track of what is happening in the Isle of Man, a better means than we have at the moment. I cannot ascertain the position with the Tynwald legislation that is parallel to this legislation. I hope that one of the Ministers will clear up that point and tell us whether the origins of the amendment had anything to do with that consideration. Are we following a change that has been made in the Tynwald legislation?

Mr. Dalyell: While the Minister is digesting that question—

Mr. Peter Snape: The hon, and learned Gentleman has got the answer—he just has to read it.

Mr. Dalyell: While the Minister is reading his answer, I should like to ask the same question in another form. The Minister of State, Home Office and I took part endlessly over two years in discussions on tangentially related problems. How does a so-called superior Parliament ascertain what is going on in a subordinate Parliament in part of a country that is supposed to be united?

Mr. Brittan: With the greatest respect, I find it difficult to see how the question of the hon. Member for West Lothian (Mr. Dalyell) relates to the Bill or, still less, to the amendment. It has not been

difficult to establish, by consultation with the island authorities, what is happening in their legislation.
I reaffirm what I said in moving the amendment. Its purpose is to ensure conformity with our criminal law procedures. We are discussing penalties in the United Kingdom. That has nothing to do with any legislation that is going through Tynwald. The Isle of Man Transfer of Functions Bill in Tynwald has nearly completed all the stages but has not yet been forwarded for Royal Assent.
The Isle of Man is not part of the EEC for fiscal or general economic purposes. However, for customs purposes and certain aspects of the common agricultural policy it is part of the EEC. I say that with some diffidence because I am not sure that it is in order to mention that in connection with this amendment. However, having said that, I reassure the hon. Member for Islington, South and Finsbury (Mr. Cunningham) of its purpose and origin.

Mr. Dalyell: Truncating what the Minister has said, is it right that in relation to the EEC the island has its cake and eats it? It seems to be getting the best of both worlds—the advantages of one without the disadvantages of the other. Is that being unfair?

Mr. Brittan: That is neither a truncation nor an expansion of my remarks. It is an expression of an opinion to which the hon. Gentleman is entitled.

Amendment agreed to.

Clause 9, as amended, ordered to stand part of the Bill.

Clause 10

EXCHANGE OF INFORMATION

Question proposed, That the clause stand part of the Bill.

Mr. George Cunningham: The clause relates to the exchange of information. It provides that no obligation as to secrecy shall prevent the United Kingdom commissioners disclosing information to the Isle of Man customs and excise service. May I take it that there is an equivalent provision in the Tynwald legislation?

Mr. Peter Rees: I understand that is so.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Clauses 11 to 14 ordered to stand part of the Bill.

Schedules 1 and 2 agreed to.

Bill reported, with an amendment; as amended, considered.

Motion made, and Question proposed, That the Bill be now read the Third time.

Mr. George Cunningham: We have had a useful discussion on the Bill. I rise on Third Reading only because references have been made from time to time, particularly by the Minister of State, Treasury, to previous discussions of different matters relating to Scotland and Wales when it so happens that several hon. Members on the Government side and several on the Opposition Benches were of a mind. I would not like there to be any misunderstanding in the Isle of Man that anyone in this House sees the relations between the United Kingdom and the Isle of Man remotely in the context of the kind of discussions that took place and the kind of difficulties we experienced over devolution to Scotland and Wales.
Devolution is not quite the word in relation to the Isle of Man. There is a degree of independence and autonomy in the Isle of Man. There always has been. I should have thought it was the unanimous view of Members of this House that there always will be. Nothing that has been said in connection with Scotland and Wales in this debate should be interpreted to suggest that anyone does not hold the view that that degree of autonomy and the relationship that has always existed should continue between London and Douglas.

Mr. Dalyell: There is no Isle of Man representative in this House or in the European Assembly. That makes a considerable difference. At the same time, on Third Reading one is entitled to say that we will find parliamentary opportunities to ask the questions which were not in order tonight, for they must be asked.

Mr. Brittan: I am grateful to hon. Members for the clarifications they have given. I am sure that these will be noted and welcomed in the Isle of Man as well as here. It is fair to say, in responding to the hon. Member for West Lothian (Mr. Dalyell), that no one present this evening will be under any illusion about his resolve to return to the wider matters concerning the Isle of Man in which he has expressed an interest. It is fair to say that there is no opposition in the House to the Bill. Its provisions have not been passed "on the nod". We have probed and examined them. The Government have tried to answer the queries that have been raised. I commend the Bill, in its amended form, to the House and ask that it be given a Third reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — DARLINGTON—BISHOP AUCKLAND RAIL LINK

Motion made, and Question proposed, That this House do now adjourn.—[Mr. MacGregor.]

Mr. Derek Foster: I am grateful for the opportunity to raise the important matter of the need to retain the rail link between Darlington and Bishop Auckland. In doing so, I have two aims in mind. The first is to place before the House what I believe to be the incontrovertible case for keeping this line open whatever may happen to any other line either this year or in any other year.
My second aim is to explore in open debate some of the discussions that have taken place, notwithstanding ministerial denials, between British Rail and the Department on British Rail's corporate review document.
If we were to close this line we should lose a significant aspect of rail history. Hon. Members will realise that this was one of the earliest bits of railway in Britain. Indeed, Shildon—a town upon this line—celebrated its 150th anniversary as a railway town three or four years ago. The residents of Shildon believe that their Timothy Hackworth rivals George Stephenson as one of the greatest innovators in railway history. Therefore,


if this line were to close, we should lose something of great value in railway history.
My major reason for contending that this rail link should not close concerns the industrial development consequences of such a course of action. I remind the Minister that Bishop Auckland lost its special development area status as a result of his right hon. Friend's policy statement earlier in the year. Many people in County Durham regard the loss of special development area status not so much as a policy decision mistake as a technical mistake within the Department of Employment. I am grateful for the courteous and understanding hearing that the Secretary of State for Industry gave to me and my colleagues on this issue. Nevertheless, we have lost our special development area status. Ultimately Bishop Auckland will become merely an intermediate area. As such it will lose all incentives for attracting new industry to an area that suffers from major unemployment problems.
Added to that, we are to lose the new town development corporation of Newton Aycliffe, which could be described as the jewel in the crown of my constituency. There has been a net gain of 4,000 jobs in Newton Aycliffe during the last four or five years, largely as a result of the dynamic industrial development policies of the team of officers of the development corporation. In view of those two factors, my constituents would regard the loss of the rail link as the last straw in a series of events since 3 May that they would now regard as disastrous in industrial development terms.
I should like to remind the Minister about the advantages of good transport communication in attracting new jobs to any area. Indeed, there is no need to remind him of this aspect. We have been attempting to attract new industry to the North-East for 40 or 50 years and we are encouraging new and existing firms to grow. We are always reminded that if we cannot attract jobs to the areas where the people are, we should encourage the people to go where the jobs are.
There is one difficulty. If we are to encourage people to be more mobile in the North-East—I agree with that objective—we need a good, reliable and relatively cheap transport system. I suspect

that if rail transport is coming under pressure either to increase fares or to reduce services, bus transport will suffer from similar pressure. Therefore, people may be forced to use their own cars—if they have them. The North-East has a lower average incidence of car ownership than anywhere else in the country. Therefore, I say "if they have them" advisedly. Cars are wasteful of energy, and expensive.
I also remind the Minister that the Shildon rail works, employing 2,500 workers, is along that line. That works, which has a long and glorious history, is to as one of the most efficient rail building and repairing. It was recently referred to as one of the most efficient railbuilding and rail repair works in Europe. It has a very bright future in supplying wagons not only for this country but world-wide. It recently won some important orders.
The Shildon works receives much of its raw materials by rail and, of necessity, its finished products must leave the works by rail. The people of Shildon feel that if the rail link were lost serious doubt would be cast upon the long-term future of the works and the prospects for its 2,500 work force. Almost every family in Shildon is touched by the prosperity, or otherwise, of the works.
We must also remember the energy-wasting consequences of such a closure. If the rail link were closed, there would be a diversion of passengers to the roads. It is estimated that 1,100 people use the rail link every day. There was a 60 per cent, increase in passenger journeys in 1977–1978 and a further 12 per cent, increase in 1978–1979. That suggests that the link is going in the right direction. If, at the moment, it is not justified in economic terms it could well be justified in the foreseeable future, particularly if, in addition to the rail halt that was built at Newton Aycliffe, there was another rail halt at Eldon. Such a halt has been long sought by local people.
Following a closure of the rail link there would be a diversion of freight to the roads. In view of the considerable increase in manufacturing jobs there, I hoped that we might eventually get a roll-on/roll-off facility at Newton Aycliffe. That would make the area more attractive to incoming industrial development and local industrialists.
The rail link does not stop at Bishop Auckland. It continues with freight into Weardale. A good deal of mineral freight traffic is carried along this line. If the line were discontinued, all that mineral freight traffic would be diverted on to the roads, with consequent waste of energy. Such a diversion would also have serious environmental consequences in many of the beautiful villages of Wear-dale.
What will be the public expenditure consequences of this rail closure? The Government are in the business of trying to save money, and the rail halt built at Newton Aycliffe only three or four years ago cost £100,000. Therefore, if the rail link were severed, far from a saving there would be a waste of public money. That would be reprehensible. As the House knows, the debate on this issue originated in The Guardian and denials were made by the Minister. It seems to me that if we are in the business of saving public money on the roads there are several options open to us. None of them is pleasant. I have the greatest sympathy for the Government and British Rail as they face this decision.
One of the options is to increase fares. Already there are suggestions for increasing fares by about 20 per cent. That would spread alarm throughout the country. It might spread even more alarm amongst Conservative Back Benchers. I expect that the Minister and his Department are under pressure from that direction.
We could reduce the subsidy on uneconomic lines. That is what we are debating in connection with the Darlington and Bishop Auckland line. The arguments that I have used could be applied to each line that is on the notorious list that does not exist except in the British Rail corporate review document. Many hon. Members on the Government Benches could use my arguments. There is political sensitivity in this issue.
Another option is to save money on wages or salaries. In order to do that, we must negotiate a salary or wage agreement that is lower that the rise in the cost of living. The unions would have something to say about that. Alternatively we could reduce staff or increase productivity with the existing staff. The Government are always stressing the need to

increase productivity. However, one of the aspects involved in increasing productivity is increasing investment to give more power to the elbow of each worker. The investment necessary must be found either from British Rail's own resources or from the Government.
The next option is to defer investment in British Rail. We need to replace much of the diesel rolling stock, which is now well beyond its original need for replacement. Perhaps it would also mean deferring the electrification of the railways and advanced freight technology.
Each of those options has serious consequences for the long-term viability of the railways. They are also serious in terms of their energy-conserving implications. The current cuts in public expenditure will prevent much of that investment, either because the Government will not make the money available or because of the high cost of borrowing in the private sector.
Railways have a bright future, not only in this country but internationally. The Government should be examining ways of supporting them so that they can reach towards this bright future. If that is accepted, the fundamental investment in electrification, in the replacement of rolling stock and in advanced freight technology must go ahead. That is important to the nation at large and to my constituency. It is particularly important to Shildon, where 2,500 jobs are dependent on the future of the railways.
I urge the Minister to give a categorical assurance that this rail link will be kept open. I hope that it will be given the highest priority in future years, when the corporate review document is studied and when the same options for saving money are considered. I hope that the Minister, having listened to the arguments, will give a favourable reply.

The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): If we were pressed for time I could reply to the speech of the hon. Member for Bishop Auckland (Mr. Foster) by saying in answer to his last question, which was whether I could give a categorical assurance, "Yes, I can give a categorical assurance that this line is not a candidate for closure, as far as I am aware it has not been a candidate for closure, and as far as I am aware


it is unlikely to be closed in the foreseeable future." However, we are not too badly pressed for time and I am grateful to the hon. Member for giving me the opportunity to deal with the future of this railway line and also some of the general issues he has raised. I shall do so fairly shortly because I appreciate that he was prompted to move so quickly to initiate an Adjournment debate by the recent rumours and so-called "disclosures" in The Guardian.
The hon. Gentleman has been the first to introduce an Adjournment debate about a railway line in his constituency, and I foresee that if I do not deal with the nature of those disclosures another 40 hon. Members will come along with similar Adjournment debates about the railway lines that were named on the front page of The Guardian.
Let me begin by dealing with a specific matter, that of the railway line between Darlington and Bishop Auckland. I hope I can set the fears of the hon. Member and his constituents at rest. I do not know of any plans to discontinue this service being brought forward by anybody. Certainly my Department has received no plans to close this service, and we have no plans or proposals of that kind in our possession. The British Railways Board has not submitted any plans for closure of this service to my Department. It does not appear on a list of closures because there is no such list of closures in my Department, and there are no proposals in any other form in my Department for the closure of this line.
Because of this Adjournment debate, and because of the hon. Member's concern, we approached the Board, following the announcement of this debate and after the disclosures in The Guardian, to ask for its views on the line. The Board assures us that as far as it is concerned there is no proposal to close this service in the foreseeable future. I therefore believe—and I have said it in as many ways as I can—that I can give an assurance that any suggestion that this line might be facing closure in the foreseeable future is ill-informed and wrong.
It so happens that this service is a very good example to use to illustrate the poor foundation for the list that appeared in the newspapers. It is a service that has a fairly promising history, and any proper

examination of the list would show that this is not a very strong candidate for closure on any ground at all. Traffic has been building up on the line since a change of policy a few years ago when the Board devised a new form of timetabling aimed rather more at local traffic patterns and with less reliance on meeting main-line connections, which in the past had apparently been the main purpose of the timetable.
The reslts have been quite dramatic. In 1973 there were 162,000 passenger journeys on this line; in 1974, 173,000, and in 1975, 222,000—an increase due to the 150th anniversary celebrations of the Stockton and Darlington Railway. In 1976 there were 185,000 passenger journeys; in 1977, 207,000; and in 1978 a staggering 321,000—almost double the figure in 1973. I am told that in 1979 the number of journeys is already 6 per cent, above the level for last year, which was such a successful year.
I am told, and I draw this management and commercial information from the Board, that the revenue earned by the line has doubled since 1977, so the traffic is picking up in a fairly remarkable way. It is a busy line, and changes in timetabling and other improvements have led to an encouraging increase in traffic and revenue. The Board demonstrated its confidence in the service by investing in improved facilities along the line. New platforms were installed at Bishop Auckland in 1976, and in 1978 a new station was opened at Newton Aycliffe.
This line—if anyone had acquired any knowledge of it—would not have appeared on anyone's list as a candidate for closure, but of course we cannot guarantee any line remaining in being for ever. I have no idea what the railway pattern of this country will be by the turn of the century. At the moment this line is doing well. I have given illustrations of the way in which it is doing well, I received assurances from the Board, and the Department has no plans to close it.
I hope that the hon. Gentleman will accept that the fears of those who use the line, those who work at the Shildon works and know the importance of the rail access, and those who derive employment in the area which is based in part on the line, are groundless. These fears were created by stories that appeared


in The Guardian and in environmental magazines such as Vole, and I must deal with them.
My difficulty lies in trying to devise new ways of saying to the House that the story is fiction. It is not true. It has no basis. The reality is that when a newspaper story of that kind appears, especially when it is given prominence on the front page of a newspaper as the main story of the day, however much Ministers protest there is a belief that there is no smoke without fire and that the story must be well founded. After a time we begin to run out of ways of trying to emphasise that the story is well wide of the mark. Certainly there is no point in getting hot under the collar about it or denouncing the people involved.
The original story was fairly dramatic. It mentioned a specific list, which was supposed to exist, of 41 lines being considered for closure. The list was said to be in the hands of my Department. The story was redolent of secret talks, the railway B division was named, and the list was reprinted, allegedly in full. Ministers were startled by that front-page story in The Guardian. We may be gullible, but on this occasion we were ultra-cautious and made considerable inquiries in the Department to discover whether things were going on in it that had been concealed from us. My right hon. Friend and I are satisfied that that is not the case. Not only had we seen no such list, and not only had we not heard of any such talks, but I am convinced from all that I heard that no such talks had taken place and that no list of that kind had reached the Department. That was the basis upon which my right hon. Friend gave as vehement a denial as he could: not to take revenge on The Guardian or to start a quarrel with it, but to quieten the fears springing in Bishop Auckland and stop them from spreading to the 40 other routes on the list.
Since then The Guardian and others have returned to the attack, reinforcing the feeling that there is something in the story. The latest stories are different from that in the first newspaper article. The secret talks and the list in our Department appear to have vanished. The references now are to lists that exist or discussions that have taken place within the British Railways Board or other organisations.
The environmental magazine Vole is convinced that my right hon. Friend is not right when he denies the story. It quotes in support of its belief a list of railway lines. The list does not come from the Board, let alone from us. It was produced by the Ramblers' Association, based on research that it had carried out. I am always willing to have talks with the association. I have the greatest respect for its work, but it is rather wide of the stories that we denied last week. We have not had the pleasure of seeing the list that was produced by the Ramblers' Association, except as it was reproduced on the front page of Vole.
The Guardian reasserted that talks of this kind went on within the Board. It quoted in support of its story the fact that various options were considered by the Board and said that the corporate review, which reached my right hon. Friend recently, contained a reference to the options which it considered.
I assure the hon. Member for Bishop Auckland that the corporate review does not contain any such list. The British Railways Board has been reviewing various options, but not in discussion with our officials. It has considered various plans for the future of provincial services.
British Rail has made no secret of its work. The revelations, which are always of interest to the public, need not have been made in such a startling way. British Rail has been telling its trade unions, consumer organisations and the general public for some time that it is concerned about the financial circumstances of local rail services.
In the commentary on the 1978 annual report, Sir Peter Parker said:
Rail wants to sustain its vital contribution to rural services, but the cost of that contribution is growing. There are many options, including the integration of bus and rail services, but these options must be exposed and some decisions faced before choice is overtaken by economic necessity.
That was a public reference to rural services.
It is not surprising that the board has made an estimate of the effect of various options without making a secret of the review that it was carrying out and hiding nothing from either the rail unions or the transport users' consultative committees. The corporate review contains no list of


specific services to be cut and British Rail has not discussed such options with officials of my Department.
The corporate review was sent to my right hon. Friend the Minister on 25 October. He will discuss that report with the Board shortly, but he has already written to Sir Peter Parker to make clear that the option of closing 40 passenger services is one which the Government have rejected.
All passenger line closures must be submitted to the Government. Since the Government took office, British Rail has not put forward proposals. If proposals had been put forward, they would have had to be considered by the transport users' consultative committees and would have required ministerial consent before being put into practice.
Therefore, closure of passenger services on the scale recently suggested is an option which the Government have rejected. If anyone is thinking of sending a list of 41 services, he can rule that out. I hope that the debate has given me the opportunity to set those rumours at rest.
The question of railway finance has been raised by the hon. Gentleman. I accept that in dealing with individual rumours and reassuring the hon. Gentleman and his constituents about a particular service we face a problem. British Rail faces problems of how to modernise, change, invest and get itself ready to provide the needed services of the future.
The supposed leaks and wild speculations of last week distract people from discussing sensibly rail options, long-term investment needs and the form that the Ministry of Transport's railway policy should take. There have been opportunities, and there will be future opportunities, to tackle the question of railway finance and investment.
On previous occasions I have indicated the Government's broad approach to railway finance. Areas of railway activity can be roughly divided into categories. There are inter-city services and freight services. The Government believe that both categories should be run on a commercial basis. We shall give the Board clear financial targets, consider investment needs with it, and come to conclusions on electrification, and so on.

We shall trust the British Rail management to put those businesses on a footing to make a useful contribution to passenger services and serve this country's freight needs.
Inter-city and freight are two areas where the long-term future for the railways is particularly bright. The recent oil crisis, the energy problems that we face, the limitations on heavy road traffic in this country and other developments are making their competitive position more attractive and giving British Rail a great deal to aim for.
South-Eastern and suburban services hardly concern us in this debate. There is a specialised problem in that area. We have had discussions with British Rail about the problems and have referred the services to the Monopolies and Mergers Commission because there is a captive market there and we should like an outside review, which British Rail would also welcome, of the efficiency with which the services are operated.
The other provincial services outside the inter-city network are sometimes called rural railways, though they are certainly not all rural. Some call them the "social railway", which is a rather unattractive phrase. It is part of the operation where a pure financial remit is not enough. There is a public interest in maintaining railway networks even in areas where they need some public support. That is the area within which the line that we are discussing falls, as do the 41 services and a number of others. The Board has made no secret of the financial problems that it faces in that area. The Government are aware of these problems, and we have to devise a sensible policy.
Various actions can be taken. I do not like quoting my own words, but in order to demonstrate that thought on this subject predates the article in The Guardian by a long way, I refer the House to what I said earlier this year:
In this area, where we accept the basic case for continued support, the Government will wish to hear from the Board what is the lowest cost way of renewing assets required for those services. The Board will need to assess the likely traffic and the least expensive way of providing a reasonable service. We shall need the Board's estimates of the extent and timing of renewal needs of these services. When we get those estimates we shall give careful consideration to the Board's view that they will need investment funds devoted to them above the level advocated in its present


programme."—[Official Report, 12 June 1979; Vol. 968, c. 408.]
One of the first matters that we have to consider is low-cost ways of maintaining some of these services. British Rail is exploring with British Leyland the possibility of a new low-cost vehicle for certain provincial services. There is also a programme of renewal of the diesel multiple units, two of which are on the line about which the hon. Member is concerned and most of which are operating on the lines which we are discussing.
Low-cost methods in themselves may not be the whole answer. We shall also consider with the Board estimates of the investment position on those lines and ways in which the transport needs of the areas can best be served. That is the approach which we have to take, in a sensible and rational way rather than just dealing with newspaper stories, to the future of provincial services.
The public service obligation is accepted. Payment is made, by way of subsidy, to the maintenance of that part of the railway service which we know needs support because it cannot be run solely on financial grounds.
Reductions have been made in the public service obligation recently. Some may think that that bears out the allegation that we are looking with a baleful eye on the future of those services. However, although there are financial constraints, reductions in the PSO are not dramatic and there are no preparations for the sort of action that we have been accused of.
In the 1977 transport policy White Paper, a £20 million reduction in the PSO grant by the end of the decade was announced by the previous Government. Of that reduction, £10 million was imposed this year. The remaining £13 million—I have changed from 1977 survey prices to 1979 survey prices—will take effect in 1980–81.
As a result of the recent public expenditure review, which is where the present Government come in, my right hon. Friend announced on 1 November a further £9 million reduction in the PSO limit. That means that of a total reduction in provision for passenger support in 1980–81 of £22 million, for which some have criticised us, £13 million had already been planned for by the previous Administration.
We hope that that can be dealt with, certainly in part, by low-cost operation, improving productivity and running the services in the rather shoestring way in which uneconomic services serving a social need have to be maintained. There is no point in my dilating on the future of railway investment or in giving detailed figures, except to say that the railways have had a fairly stable level of investment in recent years. I do not say that it is the level that British Railways wants or that it considers adequate for the future. It has had a fairly stable investment level, and there has been opportunity to invest quite heavily in high-speed trains, advanced passenger trains, and new freight rolling stock to deal with the anticipated increase in coal traffic. All that is coming along, and, to return to where we started, the new station at Newton Aycliffe was opened not too long ago.
We shall be considering with the Board the future of its investment needs. The current year's investment ceiling has not been cut. The June budget reduction of £15 million in the Board's external finance cash limit did not necessarily impose a corresponding cut in investment. It was open to the Board to meet the reduction in other ways, especially by cutting costs and improving efficiency.
I have dealt at sufficient length with the general subject of railway finance. A debate about the Bishop Auckland to Darlington line is not an adequate vehicle in which to do justice to the subject of future railway finance. I touch on the subject to try to illustrate that the Government intend to take a serious long-term view, in discussions with British Railways, at the whole range of its business, and that will include looking at the problems that it has been pointing out to us for some time—financial problems with the provincial services. The background to that will not be in secret talks. The Government's policy is, and always has been, that there will not be wholesale rail closures. There is a limit to the number of ways that we can say that. I can give an assurance that the fears in Bishop Auckland, Newton Aycliffe and Shildon are quite groundless and that this service has every prospect of being maintained in the foreseeable future.

Mr. Tam Dalyell: On a point of order, Mr Deputy Speaker.


Would it be in order to ask for guidance from the Chair on the matter of a second Adjournment debate? What is the latest hour, in the view of the Chair, at which a Member can reasonably give notice to a Minister, when it looks as if the House is going to collapse, to embark on the subject of a second Adjournment debate? Could this matter be considered at leisure by the Chair?

Mr. Deputy Speaker (Mr. Richard Crawshaw): The hon. Gentleman was good enough to mention that he proposed to raise this matter, and I thank him for the manner in which he has raised it. As I understand it, there is no specific time when it is too late to say that one wishes to raise another matter on the Adjournment. It is a matter of reason. If it is too late to get a Minister to come to the House to answer the question, the purpose of the Adjournment is nullified, because the hon. Gentleman will not get an answer to his question, which is the purpose of an Adjournment debate.
As I understand it, the hon. Gentleman sought to raise a third Adjournment debate. I understand that there is a second Adjournment debate that was granted by Mr. Speaker. Mr. Speaker was not disposed to allow the hon. Gentleman a third debate. I ought to point out that if the second Adjournment debate finishes before 10.30 pm the hon. Gentleman will be in order in raising another matter, despite the fact that Mr. Speaker does not wish him to do so. He will be doing it against Mr. Speaker's wishes.

Mr. Dalyell: I should like to thank you, Mr. Deputy Speaker, for your courtesy.

Orders of the Day — MACCLESFIELD RELIEF ROAD

Mr. Nicholas Winterton: Following the Adjournment subject raised a few minutes ago by the hon. Member for Bishop Auckland (Mr. Foster), I might be tempted to talk about the railway system and how it affects my constituency, especially the town of Macclesfield. Fortunately, unlike the hon. Gentleman who raised the subject, I have no good cause to do so, since the inter-city Manchester-London line,

upon which Macclesfield is situated, is not threatened with closure. I personally am proud of the service that British Railways provides from my constituency to London. I only wish more of the inter-city trains stopped at Macclesfield and Congleton, but I can no doubt raise that subject with my hon. Friend the Parliamentary Secretary on another occasion. However, I have sown the seeds of that idea in his mind.
In the previous debate my hon. Friend indicated that British Railways now had a golden opportunity to capture more of the travelling market because of the increase in the price of oil. I hope that British Railways will take up that challenge and provide the services that can meet the needs of those who commute or travel to our major cities, particularly those who do so on business. Many of my constituents travel very frequently indeed from Cheshire to London.
Tonight I raise the subject of the Macclesfield North-South road, otherwise known as the Macclesfield relief road. This has been around for a long time—long before I ever became Member of Parliament for Macclesfield in 1971. In fact, the history of road proposals in Macclesfield goes back more than 40 years, and the area that I represent has probably had less spent on roads than virtually any other area that I can think of.
My hon. Friend is aware of this from all the questions that I have put to him and from the informal discussions that we have had. In addition, I am sure he will know of the meeting that I had at his Department this afternoon with the chief executive of the Macclesfield borough council, Mr. John Sandford, the chairman of the planning committee, Councillor Michael Livesley, and the chairman of the highways committee, Councillor Jack Thompson. My hon. Friend is more than aware of the problems that face Macclesfield at this time because of a totally inadequate road network.
It is true to say that the Ministry has apologised to me in recent months for the delay in replying to genuine representations that I have made on behalf of my borough, and in particular on behalf of the people of the old Macclesfield borough. My borough is a progressive one. It sought to involve the North-West office of the former Department of Transport


in a joint participation exercise relating to future planning, industrial developments and road projects in the area. Unfortunately, for reasons best known to the Ministry at that time, the officials were not happy to take up that offer of joint participation. Therefore, a golden opportunity was lost for the Department and the local authority to become involved in planning the future of my area. It is for that reason that a number of the problems exist between the borough and the Ministry of Transport.
As I have said, this particular problem goes back more than 40 years. The people of Macclesfield have been very patient, but their patience is beginning to run out. There is now real urgency not only for a road project to be approved in outline but for the orders on the line of route to be laid. If a public inquiry is necessary, I hope that as soon after it as possible the construction of the road will begin.
The borough and town of Macclesfield lie equidistant between the Greater Manchester conurbation and the North Staffordshire conurbation, otherwise known as the Potteries. Therefore, I am sure that my hon. Friend is well aware of the heavy volume of traffic that passes through the borough of Macclesfield. The roads in the town are, in the main, very old. They were not constructed to take the quantity, let alone the weight, of traffic which goes through Macclesfield today.
We have the huge articulated lorries going south from Manchester. There are those which perhaps get on to the M6 just south of Stoke-on-Trent. We have the huge stone wagons from the quarries in Buxton in Derbyshire, just over the eastern Cheshire border. We have the usual heavy volume of commuter traffic. There are also tankers from the chemical works at Runcorn and the southern fringes of Manchester.
The people of my area have had to take a growing and an increasingly difficult volume of traffic in recent years. The position has now become intolerable. The environment of the residents of Tytherington in Macclesfield has been put in jeopardy by the growing volume of traffic. Coare Street in Macclesfield is a narrow street which, until a few months ago, was almost a backwater of Macelesfield,

but the attempt to solve some of the traffic problems of the borough has resulted in this once quiet street being turned into a main through road. The very attractive terraced property in this area—Macclesfield boasts a great deal of it—is beginning to suffer, not only as a result of the fumes and the noise but also because of the vibration set up by many of the heavy vehicles which are passing within three or four feet of these Victorian terraced houses.
These houses, sadly, no longer look particularly smart outside, although it is only right to say that they are little palaces within, and the rather dull exterior masks a very attractive interior. But these houses will begin to run down if something is not done very soon to remove the traffic from this road. This was, indeed, one of the first problems that I raised, when I was elected in the autumn of 1971, with the Minister in the appropriate section of the Department of the Environment. At that time, as the Minister knows, there was no separate Department of Transport.
I have mentioned the residents of Tytherington and of Coare Street. There are also the residents of Beech Lane and of Chester Road—again an area of very nice terraced property—whose environment is beginning to suffer as a result of the increasing volume of heavy traffic going through the centre of Macclesfield. The residents of Oxford Road are also affected. I raised this matter on another occasion in this House because the sewer in Oxford Road in Macclesfield collapsed. This was very shortly after the major collapse of the Oxford Street sewer in Manchester.
Macclesfield, like Manchester, grew up during the Industrial Revolution in this country, and much of the infrastructure has never been replaced or improved since those days. Macclesfield will need considerable Government funds unless the road problems facing the borough at this time are dealt with urgently by the Ministry.
I mentioned earlier that unfortunately the Department of Transport in the North-West had not taken part in the joint participation exercise which was mounted by the officers and elected members of the Macclesfield borough council. As a result, the opportunity was missed to collect a great deal of the information


which could have been useful to the Department in deciding how quickly to proceed, and what line to take for the North-South road.
If the Department had participated, it would have appreciated that certain industrial land on the existing Hurdsfield industrial estate is presently land-locked. The new road would go a long way to releasing this land for industrial development in the town of Macclesfield, thus attracting new business to the town, which would bring investment; and, as we all know, investment brings employment.
Whatever party he may represent, a Member of Parliament has a duty to do what he can to maintain a high level of employment and to ensure that the level of unemployment is at a minimum in the area that he serves.
This road is vital in order to release certain industrial land which could be so useful to the future development of Macclesfield. Additionally, it would release a limited amount of residential development land—and there is considerable demand for housing in my area. By providing Macclesfield with a speedy and correct decision, the Ministry of Transport would be not only serving the interests of my constituents but also greatly improving the local environment.
It would be unfair to say that the road which I ask the Minister to provide for my area will not be objected to by some residents because of the impact it will have upon their environment. I am very sympathetic to the desire for a rural environment, and I am aware that the north end of the Macclesfield road will undoubtedly have an impact on those who live adjacent to Flash Lane north of Macclesfield in Bollington, and also on a number of those who live in most attractive Cheshire stone cottage property in Clarke Lane, Kerridge, which is also just north of Macclesfield.
I hope that at any public inquiry, if that is necessary, the complaints put forward and the objections placed before the inspector or, perhaps, my hon. Friend will be dealt with sympathetically and fully. At the same time, I make it perfectly clear that the proposal for the road must go through for the benefit of the area as a whole.
After much pushing, much correspondence and a number of parliamentary questions prior to the Summer Recess, my hon. Friend published, on 19 October this year, the new proposals for the Macclesfield relief road. When we met at our party conference in Blackpool he indicated to me that he thought I would be delighted with the announcement he was about to make. Indeed, I was delighted until I read half-way down his press release where it said:
The easterly route will now be developed in more detail leading to the publication of Orders under the Highways Acts. In the course of settling the precise route, the Department will also be considering whether the northern end of the road should be in the Beech Bridge area instead of at Flash Lane as previously proposed.
My heart sank when I read that, because instinctively I realised that one of the major objectives of the road would be lost if it were shortened.
As I have indicated, the road is scheduled to pass up an old railway line, which is now closed, and the rugby club land which lies on one side is already owned by the Ministry of Transport. If the road were shortened, it would not serve the industrial estate, and one of the main purposes of the road, which is to take the heavy volume of industrial traffic out of the town centre, would be lost. In the brief discussions which I had with the deputation from my borough at the Minister's office this afternoon, this point was highlighted. It is absolutely vital that this road proceeds and goes the full length from the centre of the town to Flash Lane. If it does not, the heavy traffic will continue to use the same old road and the environment of Macclesfield will continue to suffer.
I am aware that the Government seek to curb and restrain public expenditure, and quite rightly so. No doubt Labour Members will claim that there are always exceptions and that every hon. Member thinks that his constituency case is one such exception. I do not readily make that claim even though I advance it tonight. However, I must point out that we have been waiting 40 years for a road, and that is no mean time. Bearing in mind the extent to which Macclesfield has expanded in the past 20 years and the fact that there are overspill estates from Manchester established around Macclesfield, I think that my claim is justified.


There are also two industrial estates established in Macclesfield—including a major one—which generate traffic, not just heavy commercial traffic serving the factories but commuter traffic.
Many of my smaller residential estates have suffered dramatically as a result of the establishment of these industrial estates. Small, narrow roads that are completely unsuitable for motor vehicles are being used as through roads by those on the industrial estates. It is a miracle that youngsters living nearby in the terraced houses have not been killed. Most of these terraced houses do not have gardens, and the front doors open straight on to the street. The mothers cannot always watch their children. They must sometimes let them have a breath of fresh air. If these youngsters walk straight out into the street, there is a real danger from heavy traffic. It is a blessing that no children have been killed. We have had some serious accidents but up to the present time, touch wood, no lives have been lost. This is more by chance and Divine providence than by good management.
I hope that my hon. Friend the Parliamentary Secretary appreciates the strength of feeling in Macclesfield for this new road. I make a plea that the Ministry should disregard the Beech Lane spur and should heed the strength of feeling in the borough, as well as the opinions of Cheshire county council and the Federation of Commerce and Industry locally. This opinion is entirely against the shorter route, which would defeat so many of the good purposes for which the road is required.
I know that the Ministry of Transport must carry out a cost-effective exercise to see what can be justified on economic grounds. I have advised my hon. Friend of limited additional residential developments which will inevitably result if the road is constructed to its full length as originally proposed. Also, there will be considerable industrial development if the road is constructed to its full length.
At the moment, much property is being scarred and is suffering as a result of fumes, noise and vibrations. If the road is constructed, this property will be saved and maintained to a satisfactory standard. I believe that the proposals that the borough hopes will be forth-

coming from the Department are the right ones and can on every ground be justified. I should be amazed if the cost study came to the conclusion that the road could not be justified. I should want to go into the figures in detail if that were the result of the study.

Mr. Barry Sheerman: The hon. Gentleman has mentioned restricted roads and a great deal of traffic. Has the local authority carried out lead pollution tests? Is lead pollution a serious factor? There are some high levels of lead pollution in the lanes and roads in which children play. I think the hon. Gentleman knows of the levels of hyper-activity that are related to high levels of lead pollution.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Waddington.]

Mr. Winterton: I am grateful to the hon. Member for Huddersfield, East (Mr. Sheerman) for his intervention. It almost enables me to make another speech. However, I shall resist that temptation.
There is no doubt that many of those who came to live in Macclesfield, and many of those who have lived in Macclesfield for many generations, have never until recent years been subjected to the traffic nuisance that they now experience. I have referred to the noise nuisance and to the vibration nuisance. Inevitably, there is the danger of lead contamination. We know of the harm that can be done to the human body by lead contamination and pollution. I hope that the hon. Gentleman's argument has registered with my hon. Friend the Parliamentary Secretary. It is an argument that must be added to those that I have been putting before the House.
The road is vital for the interests of my constituency. And I am grateful to the Minister for arranging at quite short notice to meet the deputation to which I have referred. I regret that, because of the strange way in which the House operates, it was necessary for the deputation that I took to the Ministry in Marsham Street to have a limited time given to it. That was because the Minister had to be in his place in the House for the


presentation of a Bill. However, the chief executive and elected members of the borough council who were members of the deputation are grateful to my hon. Friend. They believe that in the short time that he was able to give to them they were able to put to him the main points as they see them for the need for the longer version of the road.
My hon. Friend may say to me that the £1·8 million that will be needed to build the additional piece of road that I so strongly urge upon him is a great deal of money. If we take into consideration the growth of Macclesfield and the wealth created in Macclesfield for the area and for the country, the investment is modest. It may ensure that Macclesfield will be able to make a greater contribution to the wealth of the area and to the wealth of the country generally than hitherto.
I indicated earlier that Macclesfield is a major conurbation equidistant From Greater Manchester and the Potteries conurbation. It is the major industrial town between Greater Manchester and the Potteries. It cannot continue to serve the community and to provide jobs unless it has adequate road communications. It is a pity that the area did not benefit from some of the magnificent road projects that were constructed a few years ago in Lancashire. I suppose it is possible that, if the area had so benefited, its wonderful rural environment might have been spoilt to an extent. The local plan and its success and the county structure plan that has come before the Secretary of State for the Environment indicate that the road is a vital organ in the success of all the development that is planned in the area that I represent.
I repeat that it is a pity that the Department of Transport was not available to participate in the joint exercise mounted by my borough council. Like hon. Members, borough councils are inclined to take all the slings and arrows but come in for little praise, although there are exceptions. My borough council set out to improve the area, and I hope that my hon. Friend the Parliamentary Secretary will do his best to help Macclesfield.
Speed is of the essence. When the cost exercise has been carried out by my hon. Friend's Department, I hope that without delay he will publish the line orders. I hope that a public inquiry will not be necessary, but if objections are received

from individuals, rambler associations, civic trusts or from such bodies as the Council for the Preservation of Rural England I hope that they will be dealt with quickly and that the inspector will be instructed to take evidence and reach a judgment as swiftly as possible.
There is no point in protecting a limited section of the environment only to destroy irretrievably large sections of an extremely attractive old Cheshire mill town. The Minister must of course listen to objections, but the overwhelming local view is that the road is required.
The Minister should not consider the shorter version. That would defeat the main objectives of the proposed road. We want the full route.
I do not often come to the Government with demands for public expenditure. I am one of many Conservative Members who believe in sound money and in our communities and companies paying their way without huge Government handouts.
The people who live in Macclesfield and the companies that operate there—ICI is one of the larger and there are many textile companies that go back over the generations—have made great contributions to our economy. Macclesfield deserves a road network worthy of the twentieth century and not merely of the eighteenth century and the Industrial Revolution which generated the development and expansion of Macclesfield. We have moved to keep up with the times. Sadly, the roads in my constituency and particularly in the old borough have not kept pace. The people and the excellent buildings are beginning to suffer a heavy burden and cost.
I hope that my hon. Friend will deal with the matter as expeditiously as possible. If a public inquiry is necessary, the inspector should consider all the representations as quickly as possible, and the Department can then come forward with a route—and I ask for the longer route because I am concerned for the future of Macclesfield.

The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): I am happy to turn from the problems of the railways at Bishop Auckland to the roads in Macclesfield. The hon. Member for Huddersfield, East (Mr. Sheerman) introduced the subject of lead


pollution and lead in petrol in a debate on motor-cycle safety in the Adjournment debate two nights ago, and I hope that I shall be forgiven if I do not deal with that subject also this evening, although at some time it may be a suitable one for an Adjournment debate. It may be a suitable subject for debate, but it should be kept until we receive the report of the working party, which the DHSS will have to consider.
The medical problems of lead in petrol will have to be considered in the light of any evidence to support the fears about its effect on children. My Department has carried out studies on the practical problems of lead in petrol and the effect, in terms of performance and consumption, of reducing the lead. We are reducing the level of lead and holding it to the level of 1972. Despite increases in traffic, we are not allowing it to rise above that level. If there is evidence to support the fact that damage is being done by the present level of lead in petrol or in the atmosphere of crowded roads, the Government will not hesitate to take quick action.
Tonight we are discussing the problems of Macclesfield. I assure my hon. Friend the Member for Macclesfield (Mr. Winterton) that I am extremely familiar with the problems of that town—in particular, the inner relief road. That familiarity is almost entirely due to his efforts in urging upon me the case for decision and progress on the relief road. Since I came into the Ministry my hon. Friend has been extremely persistent in pressing his case by correspondence and questions. Before the Summer Recess he tried to gain parliamentary time on the Consolidated Fund Bill to raise the subject. He was defeated because, even in the small hours of the morning, time ran out on that occasion. He followed that up with a parliamentary question and induced me to promise, in my reply, a decision on the matter by September.
We met at the party conference and my hon. Friend lobbied me about my failure to produce that decision. I told him then that I hoped shortly to produce a decision of which he would approve. I now find that he approves of my decision in part but has strong reservations about one feature. I am grateful that he brought his deputation from Macclesfield

to see me. He has represented to me the strong public opinion of Macclesfield. He has now raised the matter in an Adjournment debate in order to put his case on the record and to strengthen it again.
I have a map in front of me of the plans for the Macclesfield inner relief road. I feel that I know most of it intimately. The result of my hon. Friend's lobbying has been to concentrate my mind on the subject considerably. When I announced the preferred route on 18 October, I hoped that he would be happy with that. He now informs me that there is a problem, and I hope to be as helpful as possible in answering his complaints and forwarding the plans for the inner relief road.
One of the first things that my hon. Friend brought to my attention was the age of the project. He tells me that it goes back 40 years. I can trace the matter back to a town plan of 1958, which is only 21 years ago. However, there has been lamentable delay. Public exhibitions were held in 1973 which led to nothing. The project was lost in a round of public expenditure cuts and the work made little progress thereafter.
When my hon. Friend first pressed the matter upon me, he complained about the delay and said that the Department had not responded to invitations to take part in a public exhibition that was held by Macclesfield in connection with the town plan. There was lamentable delay on that occasion and I have apologised to my hon. Friend about that. We also tried to see what could be done to get something moving. There is considerable pressure for a solution to the problem, as my hon. Friend has said. The traffic problems in Macclesfield are intolerable and the case for relief is strong.
On 18 October I announced a decision choosing between the two possible routes that a north-south road through Macclesfield might follow—an eastern inner relief road or a western bypass. My hon. Friend described the two lines of blight in the middle of the town because of the years of indecision about which route to take. He confirmed that he believes that the large majority of his constituents will approve the choice of the eastern route. That is the one that we have chosen. That is the preferred route. One immediate achievement, as a result of my hon. Friend's pressure and, eventually, our


decision, is that the blight that had been lying upon the previous possible route for a western bypass has now gone. Future land use in that area will be unaffected by any fears of a road scheme. A preferred route, the first stage in the statutory processes, was announced on 18 October. Once a preferred route has been identified, there are various statutory protections against blight so that those who live along it can require my Department to buy their property from them at market prices if they have difficulty in disposing of it because of the road plan.
The preferred route includes the full stretch from Mill Lane through the centre of Macclesfield going out to the north, to Flash Lane. This is the route that my hon. Friend pressed upon me. It also included, as an option, a possible shortening of the project by putting in a Beech Bridge link, taking, unfortunately, part of King's school playing field, but shortening the whole road and going into the main Manchester road for the northern exit from the town.
I thought that my announcement would please my hon. Friend. He has left me in no doubt that he does not appreciate the inclusion of the Beech Bridge option. He has assured me again tonight that matters would be greatly improved in Macclesfield if that option could be removed.

Mr. Nicholas Winterton: The borough council at a recent meeting clearly indicated its view that it was opposed to the Beech Bridge spur and wanted the full length of road constructed as proposed. My initial reaction to his welcome decision that the eastern option was the one to be supported by his Department is supported by the elected representatives of the Macclesfield borough council.

Mr. Clarke: I regret to say that I have not been to Macclesfield. I have relied heavily on my hon. Friend for indications of likely public reaction in the town. This seems to have been proved right. I note what my hon. Friend says about the resolution. The councillors and officials whom he brought to see me this afternoon confirmed what he says.
Macclesfield borough council plainly feels as strongly as he does that the Beech Bridge link will be unpopular in Macclesfield and will have unfortunate effects on the development of the town.

I would like to explain what this announcement of the preferred route, with the link that my hon. Friend does not like as a possible option, amounts to. Once a preferred route has been indicated, there is statutory protection for property blighted and work proceeds on deciding the precise route and layout that might be followed.
What happens now is that work will be done updating traffic forecasts, surveying, in more detail, the precise route and layout, and paying regard to the Department's updated traffic forecasts and the Department's present design standards for roads of this kind. At the end of that process, draft statutory orders will be produced, indicating in more detail the line of the road that we propose to build. After that review, the draft orders will no longer contain an option between two routes. I will eventually take a ministerial decision on which of these lines to produce the draft orders. The decision will be influenced very much by what my hon. Friend said about public opinion and about the development of the town.
The decision also has to be influenced by a sensible and rational analysis of the cost benefit of the scheme. Modern road building and road planning is not the automatic process that some fear. Among the issues now to be considered are sophisticated methods of relating the economic cost of a scheme and variations of a scheme against the likely benefits to the community, both environmentally and in terms of avoiding waste of traffic time and assisting industrial and other traffic to get along our main arterial routes. That is the process to be gone through before a decision is taken whether to produce draft orders. Once draft orders are produced, these will be our detailed plans for the construction of the road.
There will be a set time within which objections may be made. If there are objections, there will be a public inquiry, where the whole matter can be considered. As my hon. Friend said, there are bound to be some who say that there should be no road and others who argue about the route. All those arguments can be canvassed before an independent inspector at a public inquiry.
In deciding what draft orders should be put forward for consideration at a public inquiry, I shall be considering economic


analysis, environmental problems and the strong representations of my hon. Friend and the borough about the preferred route. In a way, they all come together. I am grateful to the delegation today not only for putting its strong views on behalf of the borough but for explaining in detail some of the queries about possible developments along the line that might be chosen that would influence not only the traffic flows and forecasts but the economic advantage of the proposed longer route.
I appreciated the opportunity of considering with members of the delegation the position of the Hurdsfield industrial estate and their strong views about the effect of the northern extension to Flash Lane, facilitating the proper movement of traffic in and out of the industrial estate.
I was interested to hear about the likely position at Tytherington, although that is subject to litigation and planning procedures. I am told there is a possibility of some limited residential development. That will have to be decided in the forthcoming procedures. If there were such development on that side of the Manchester Road, that would have an effect on the scheme in respect of the traffic that might be carried along the Manchester Road rather than the northern extension. All these factors—the traffic position in the town and the nature of the road out to the north of Macclesfield through Tytherington—will be of great assistance in evaluating the scheme and moving on to the production of draft orders.

Mr. Nicholas Winterton: In order to substantiate the view expressed by the borough council and myself, may I read and ask for my hon. Friend's comments on an editorial opinion in the Macclesfield Express on Thursday 8 November headed "No Relief"? It reads:
Whoever finally made the decision that Macclesfield's pie in the sky ring-road route should be changed again (this time to commence at Beech Lane bridge) has not only extended this unbelievable saga by a few more years but has effectively altered the prime objective of the route—to be a relief route.
Admittedly, this latest idea will still by-pass the town centre but the snarl-ups at Tytherington will be there.
And with ever increasing housing in Tytherington"—

to which my hon. Friend referred—
a great big school slap bang where the access is planned and traffic on the up and up, the decision seems even more incredible.
There is one good point about it, however, and that is blighted property may be reprieved—but until a decision is made one way or the other, then the relief for owners is not there.
So many words have been spoken, so many written, about this sad road that there is little left. Opinions differ, but the majority agree that a relief road is needed.
Over the years it has chopped and changed so much that were it not so serious a matter the whole thing would be a joke.
To an extent, I hope that my hon. Friend will appreciate that the local paper, reflecting local opinion, also supports the relief road project that I have urged upon him.

Mr. Clarke: That underlines my hon. Friend's argument again. With his assistance, I have been trying to stop it being a joke. I have been trying to reach some decisions and to get on with producing a definite scheme so that Macclesfield may know where it stands.
We have got rid of the western outer bypass. No decision has been taken to put it through Beech Lane bridge. It has been put up as an option. I have taken on board that it is an unpopular option. Engineering work and appraisals have to be done. I shall be producing draft statutory orders setting out one line and that will then be submitted to a public inquiry.
My intention throughout, in response to my hon. Friend's urging, has been not to prolong the whole matter by years. The great failing of many road schemes—this appears to be one of them—is that uncertainty about line, controversy for and against, the general misfortunes of public expenditure, and so on, lead to years of indecision, delay, blight, and damage to property values.
I hope that I have forwarded matters. If clarity has not so far produced exactly what my hon. Friend requires, I trust that when I make my next decision the result will be clarity. I will bear in mind everything that my hon. Friend says and see whether I can be justified in coming to the decision that he would wish.
My hon. Friend asked when the road would be built and about resources. Every estimate that I give about the building of a road—I am sure that previous Ministers have been in this position


—is subject to the statutory procedures. Objectors have their rights. An inspector may be persuaded that a road is not required. People must be allowed a hearing. Building is also subject to the availability of resources and at the moment the whole trunk road programme is subject to review in the light of the recent statement on public expenditure for next year and beyond.
The trunk road programme has not been savagely cut, but transport expenditure must take its share of cuts. We must consider the timing of schemes so that we can choose the right priorities and fit them into resources for the coming years. While the review is in progress, it is of no assistance to my hon. Friend or, indeed, to any other hon. Member for me to try to put a date on a scheme of this kind.
The Government's White Paper on public expenditure generally will emerge in the new year. That will give the public expenditure forecast for the next few years, and my Department will follow that up as quickly as possible with its own White Paper on roads. That will spell out the implications of public expenditure planning for trunk road programmes for the next few years. Although we have not yet completed the review, I expect

that we shall be able to gain from it some useful and reliable dates for schemes, subject to the statutory procedures. At that stage I shall be able to give a clearer indication of the availability of resources and likely dates of construction.
I cannot promise my hon. Friend that building will be immediate. The current review will not lead to schemes being abandoned, but their timing will certainly be affected as we work through our priorities. My hon. Friend can be reassured that his efforts over the last few months have left me in no doubt about the strength of feeling in Macclesfield and in no doubt of the lobbying that I shall receive from him and his constituents if they feel that Macclesfield continues to be neglected.
We have had a close look at the route and at the traffic priorities in the area. I hope that eventually I shall succeed in satisfying my hon. Friend, in part at least, and that, with assistance, we will achieve some progress, so that the people of Macclesfield will see that their traffic problems are being given serious consideration by the Government.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Ten o'clock.